COMMISSIONER OF INCOME TAX Vs. M. MANI

JUDGEMENT

(1.) THE question raised is whether the 'studio building' is entitled to depreciation at the rate applicable to 'plant'. In order to grant depreciation claimed by the assessee, the building in respect of which depreciation is claimed has to answer the description of 'plant'. This Court in CIT v. Navodaya (2004) 186 CTR (Ker) 357 : (2004) 271 ITR 173 held that studio building constructed for film shooting is entitled to depreciation as 'plant'. However, the specific finding in that case was that Tribunal members along with Departmental Representative and assessee's representative on visit of the building noticed that building is not a static one but could be adjusted depending upon requirements of the location for the movie.

(2.) IN this case there is no finding by any authority that the building is of any special nature to treat it as a plant. In fact in CIT v. Anand Theatres : [2000]244ITR192(SC) , the Supreme Court held that building housing the theatre, hotel, etc., do not constitute 'plant' as defined under the Act. The building in this case is a normal structure and is not entitled to depreciation as 'plant' irrespective of whether it is used for film shooting or not. On the other hand, if the building is such a flexible one that it could be modified or adjusted to suit the requirement of any film shooting or occasion, then it can be called 'plant'. Since there is no finding in the orders of the Tribunal that the building involved in this case is a peculiar one, as found by the Tribunal in Navodaya's case (supra), we decline to answer the question, but set aside the order of the Tribunal and remand the matter back to the Tribunal for fresh finding after getting details of facts about the nature of activities, the material used in the construction and the design, etc. of the RC building. If the building is of the type found in the Navodaya's case (supra), then the Tribunal will grant depreciation treating it as 'plant'. On the other hand, if it is an ordinary structure, the building does not qualify for grant of depreciation as 'plant' as held by the Supreme Court in Anand Theatres case (supra), no matter there may be some internal arrangement for setting (shooting). It is for the Tribunal to get facts on record and decide the matter, and if required they are free to remand the matter to the AO to verify and decide the issue.