Commissioner of Income Tax vs K.G. Arts Centres (P.) Ltd.

R. Jayasimha Babu, J.—The assessee''s claim that the theatre building owned by it should be regarded as plant has been accepted by the Tribunal. The Revenue is before us questioning the correctness of the order of the Tribunal. The assessment years are 1985-86 to 1987-88.

This court in Commissioner of Income Tax Vs. N. Sathyanathan and Sons P. Ltd. and Hotel Srilekha (P.) Ltd., , (Tax Case No. 949 of 1998), decided on June 15, 1998 considered the claim of the assessee that the hotel building owned by it should be treated as plant. That claim was negatived. The reasons given therein for reaching that conclusion are equally applicable here. A theatre building is primarily a building in respect of which depreciation can be claimed only in accordance with and at the rates prescribed for buildings and it cannot be treated as plant only on the ground that the assessee carries on business of running a theatre.

The question referred to us is therefore answered in favour of the Revenue and against the assessee.