Victory Acqa Farm Ltd. v. Commissioner Of Income-Tax

G. Sivarajan, J.:— These two appeals are filed by the Commissioner of Income-tax, Thiruvananthapuram, against a common order of the Income-tax Appellate Tribunal, Cochin Bench in I.T.A No. 756 (Coch.) of 1995 and I.T.A Nos. 446 (Coch.) of 1998 and 447 (Coch.) of 1998. I.T.A No. 756 of 1995 before the Tribunal was filed by the respondent-assessee in respect of the assessment year 1992-93 and I.T.A Nos. 446 and 447 of 1998 were filed by the Department in respect of the assessment years 1994-95 and 1995-96. These two appeals are filed against the order of the Tribunal in I.T.A Nos. 756 of 1995 and 447 of 1998.

2. Sri P.K.R Menon, learned senior Central Government standing counsel for the Revenue submits that one more appeal, I.T.A No. 82 of 2000 against the order in I.T.A No. 446 (Coch.) of 1998 was also filed which is pending.

3. Senior counsel submits that the Tribunal has decided the appeals in favour of the assessee relying on a decision of the Full Bench in CIT v. Hotel Luciya, [1998] 231 ITR 492 (Ker) but the Supreme Court has reversed the said judgment in a batch of appeals in CIT v. Anand Theatres, [2000] 244 ITR 192. Senior counsel on the basis of the aforesaid decision submits that the orders of the Tribunal have to be set aside and the appeals have to be allowed.

4. Though notice was served on the respondent-assessee there is no appearance for the respondent. Since the senior standing counsel submitted that the matter is covered by the Supreme Court decision, we have perused the orders of the Income-tax Appellate Tribunal and the decision of the Supreme Court in Anand Theatres' case, [2000] 244 ITR 192. We find that the Tribunal, for deciding the matter in favour of the assessee, had relied on the decision of the Full Bench of this court in Hotel Luciya's case, [1998] 231 ITR 492. We also find from the decision of the Supreme Court in Anand Theatres' case, [2000] 244 ITR 192 that the Supreme Court has specifically referred to the decision in Hotel luciya's case, [1998] 231 ITR 492 (Ker) [FB] in page 200 of the said Report and the appeal against the same is also stated as being disposed of along with Anand Theatres' case, [2000] 244 ITR 192 (SC) by the said judgment. The Supreme Court has reversed the judgment of the Kerala High Court in Hotel Luciya's case, [1998] 231 ITR 492 [FB] and decided the matter in favour of the Revenue by holding that a building which is used as a hotel or theatre cannot be given depreciation as plant.

5. In view of the said decision of the Supreme Court the question on which notice has been issued, viz,: “Whether, on the facts and in the circumstances of the case, and also in the light of the decision of the Supreme Court in Anand Theatres' case, [2000] 244 ITR 192, the Tribunal is right in law and fact in holding that the pond in the case of the assessee is to be treated as plant and is eligible for depreciation at the rate applicable to plant and machinery?” has to be answered in favour of the Revenue and against the assessee. Consequently the orders of the Income-tax Appellate Tribunal in I.T.A No. 756 (Coch.) of 1995 and I.T.A No. 447 (Coch.) of 1998 are set aside and the orders of the Assessing Officer are restored. The order of the first appellate authority on this point also goes.

6. These appeals are allowed as above.