COMMISSIONER OF INCOME TAX Vs. HOTEL LUCIYA

JUDGEMENT

(1.) AT the instance of the Revenue, the Tribunal, Cochin Bench, referred the following questions relating to the asst. year 1985 86 for the opinion of this Court:

(2.) THE reference came up for hearing before a Division Bench of this Court. Whereas, the Revenue in support of its case that the Tribunal was wrong in holding that hotel building is 'plant', relied on the decision of this Court in IT Ref. No. 155 of 1991 [reported as CIT vs. Damodar Corporation Hotel Pankaj (1997) 137 CTR (Ker) 574], the assessee relied on Scientific Engg. House Pvt Ltd. vs. CIT (1985) 49 CTR (SC) 386 : (1986) 157 ITR 86 (SC) : TC 29R.512 in which the Supreme Court relying on the classic dictum of Lindley L.J. in Yarmouth vs. France (1887) 19 QED 647 and the dictum of Lord Reid in IRC vs. Barclay, Curle & Co. Ltd. (1970) 76 ITR 62 (HL) : TC 29R.489, amongst others, laid down certain tests to find out as to what is 'plant' and contended that the tests laid down by the Supreme Court are fulfilled in this case and, therefore, the hotel building is 'plant', entitled to depreciation applicable to 'plant'. The Division Bench, which was in seizin of the reference, noticed a marked inconsistency between the decision of this Court in IT Ref. No. 155 of 1991 and the decision of the Supreme Court in Scientific Engg. House (supra). IT Ref. Nos. 54 & 55 of 1995

(3.) BEFORE a Division Bench of this Court, counsel for the Revenue contended that the question is squarely covered by the decision dt. 3rd Sept., 1996, of the Division Bench of this Court in IT Ref. Nos. 100, 101, 111 and 112 of 1992 [reported as CIT vs. Sasidhara Shenoy & Bros. (1998) 147 CTR (Ker) 329]. Counsel for the assessee, on the other hand, pointed out that in IT Ref. No. 44 of 1994, correctness of the decision in IT Ref. No. 155 of 1991 (supra), which was relied on by the Division Bench of this Court in IT Ref. No. 100 of 1992 and connected cases, was questioned and then the Division Bench in IT Ref. No. 44 of 1994 referred the similar questions to a larger Bench.