Commissioner of Income Tax vs Damodar Corporation

T.L. Viswanatha Iyer, J.—The question which arose for decision before the Appellate Tribunal was whether the hotel by the assessee was "plant" entitled to depreciation at 15% and to investment allowance. The Tribunal held against the Revenue. The application for reference has been rejected on the ground that the Madras Bench of the Appellate Tribunal had earlier refused to refer a similar question.

After hearing counsel for both sides, we are satisfied that there is a question of law arising in this case. The facts as such are not in dispute. The only question is whether the hotel will constitute a "plant" for the purpose of allowing depreciation. Thus, there is a pure question of law which has to be referred by the Tribunal u/s 256(1).

We, therefore, allow the original petition. The Income Tax Appellate Tribunal, Cochin Bench, is directed to draw up a statement of the case and to refer the following question of law for the opinion of this court :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the hotel run by the assessee was "plant" entitled to depreciation at 15% and investment allowance ?