Kerala High Court
Commissioner Of Income-Tax vs Abad Hotels India (P.) Ltd. on 23 September, 1999
Equivalent citations: [2000]241ITR15(KER)
Author: Arijit Pasayat
Bench: Arijit Pasayat, K.S. Radhakrishnan
JUDGMENT Arijit Pasayat, C.J.
1. On an application under Section 256(1) of the Income-tax Act, 1961 (in short "the Act"), the following questions have been referred for the opinion of this court by the Income-tax Appellate Tribunal, Cochin Bench (hereinafter referred to as "the Tribunal") :
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee is entitled to concessional rate of tax as is applicable to 'companies other than a trading or investment company' ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding :
(i) hotel building is a plant ?
(ii) the equipment used in the kitchen and store room can be conceivably looked upon for the purpose of producing an article or thing ?
(iii) there is production of food materials in a hotel ?
(iv) the assessee is entitled to the investment allowance under Section 32A of the Income-tax Act on the building housing the kitchen, store room and the equipments used for 'producing' the food stuffs ?
(3) Whether, on the facts and in the circumstances of the case, the assessee is an industrial undertaking engaged in the production of an article or thing as contemplated under Section 32A of the Income-tax Act ?
(4) Whether, on the facts and in the circumstances of the case and the second ground being against the denial of investment allowance on additions to plant and machinery should not the Tribunal have confined the relief to the same ?
(5) Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee is entitled to extra shift allowance on the building as if it were a plant ?"
2. The assessee is a company in which the public are not substantially interested and it derives income from hotel business. The relevant assessment year is 1987-88. As some of the conclusions of the Assessing Officer as well as the first appellate authority were not in its favour, the second appeal was filed before the Tribunal. As the Tribunal decided the matter in favour of the assessee, on the issues involved in the questions, an application under Section 256(1) was filed for referring certain questions to this court for opinion. The prayer was accepted, and along with a statement of case the aforementioned questions have been referred for opinion.
3. We heard learned counsel for the Revenue. None appeared for the assessee. All the questions referred to above are covered either by the decision of this court or that of the apex court. So far as the question whether hotel building is a plant is concerned, the matter is concluded by decision of a Full Bench of this court in CIT v. Hotel Luciya [1998] 231 ITR 492, wherein it has been held that the hotel building is a plant. We are in agreement with the view. Accordingly, the question referred is answered in the affirmative, in favour of the assessee. So far as the question whether equipment used in the kitchen and store room can be conceivably looked upon for the purpose of producing an article or thing or there is production of food materials in a hotel is concerned the matters stand concluded by a Division Bench of this court in CIT v. Vrindavan Hotels (P.) Ltd. [1999] 238 ITR 224. In view of the said decision with which we agree, the answer to the concerned question is in the negative, in favour of the Revenue and against the assessee. So far as the question relating to investment allowance is concerned, that question also stands concluded by the aforesaid decision in Vrindavan Hotels (P.) Ltd.'s case [1999] 238 ITR 224 (Ker). The answer, therefore, is in the negative, in favour of the Revenue and against the assessee. So far as the question whether the assessee is entitled to extra shift allowance on the building as if it were a plant is concerned, that question stands concluded by a decision of the apex court in East India Hotels Ltd. v. CIT [1997] 223 ITR 1. The answer is in the affirmative, in favour of the assessee and against the Revenue. So far as the question as to denial of investment allowance on additions to plant and machinery is concerned, no answer is necessary in view of the answer in respect of other questions.
4. The reference is answered accordingly.