Judgment:
V. V. KAMAT, J. :
The question in all these four references is one and the same and it is as follows :
'Whether, on the facts and in the circumstances of the case, the building constructed by the assessee and used as cinema theatre constitutes plant and is entitled to higher rate of depreciation ?'
Although in the first two references the assessee is M/s. Sasidhara Shenoy & Bros., in the other two references the assessee is M/s. New Guna Shenoy & Co., yet all these four references relate to asst. yrs. 1984-85 and 1985-86.
2. The Revenue has brought these four references against the finding of the Tribunal treating the building constructed by the assessee and used as a cinema theatre constitutes plant as a whole and, therefore, entitled to higher rate of depreciation.
3. Depreciation is an aspect statutorily provided under s. 32 of the IT Act, 1961.
4. This Court had an occasion to consider the statutory provisions of the said section in IT Ref. No. 155 of 1991 by the judgment dt. 5th August, 1996 (delivered by one of us-myself-on behalf of the Bench) [reported as CIT vs. Damodar Corpn. Hotel Pankaj (1997) 137 CTR (Ker) 574].
5. On analysis we considered the statutory provision of s. 32(1) of the Act, that it enacts that depreciation is available to the assessee, referable to the situation of ownership and use, for the purposes of business or profession and such depreciation is referable to buildings, machinery, plant or furniture. The assessee claims benefit of depreciation, on the strength of his ownership and user. This ownership and user gets attributable to its use for the purpose of business or profession of the assessee. The benefit of depreciation, as the language of the statutory provision proceeds, becomes available to the assessee with reference to buildings, machinery, plant or furniture.
6. It is observed that any permissible confusion cannot be visualised on any count for a contention that the entire building could be understood as a plant. The unambiguous statutory language of the provision, we have observed, would further show that there is specification of mode of calculation of percentage with reference to the claim attributable to the four sources, namely, building, machinery, plant or furniture. The language, plain and straight of the statutory provision prohibits any scope for a contention that the entire building will have to be considered as a plant when buildings, machinery, plant or furniture are separate and distinct as items referable to the claim of depreciation in regard thereto. We have held that they are referable individually and separately from each other.
7. The process of reasoning found strength in the language of s. 32A of the Act, relating to the investment allowance. Referring to the statutory provisions of s. 32A of the Act we have also found out in support that the words 'machinery and plant' occur with an exclusive character, as different from each other. We have also held that the provision of depreciation is available to the assessee and it is available to the assessee on the basis of his ownership or user of the property in regard to which a claim is under consideration for grant of depreciation. The said property, according to the statutory provision, is referable to four sources, namely, buildings, plant, machinery and furniture. We have noted that the percentage of the grant of depreciation in regard to these four items is different.
8. Learned counsel for the assessee in these references sought to urge that this Court in IT Ref. 135 of 1991 while deciding on 5th August, 1996, was concerned with the question as to whether the hotel run by the assessee was a plant entitled to depreciation at 15 per cent and consequential investment allowance. Learned counsel sought to urge that the hotel and the cinema theatre could not go together in the process of consideration of grant of depreciation. Learned counsel submitted that the question of depreciation would assume different character in a situation where the assessee is a hotelier from the situation, as in the instant references, where the assessee is the owner or user of a cinema theatre. Learned counsel placed reliance on the decision of the Allahabad High Court in S. K. Tulsi & Sons vs. CIT : [1991]187ITR685(All) , where the question was as to whether the Tribunal there was right in holding that the cinema building and the tube lights together with fittings do not constitute plant within the meaning of s. 43(3) of the IT Act with reference to the claim of development rebate and depreciation at 10 per cent on the building. We have gone through the said decision carefully and cautiously. We find that the statutory provision, as discussed by this Court or even otherwise has not been considered. The question under reference was also different in the context and content. The question before us is whether the building constructed by the assessee and used as cinema theatre constitute as a plant as a whole.
9. In our judgment the language of the statutory provision with regard to its application would not be different in its application to the building used as a hotel or even if it is used as a cinema theatre or may be used as a factory in regard to the situation dealing with consideration of the grant of depreciation. The plain language of the section this Court has analysed and we see no reason to take any view other than the one taken in IT Ref. No. 155 of 1991. For all the above reasons we answer the question in the negative in favour of the Revenue and against the assessee.