K. Shivashankar Bhat, J.—In respect of the assessment year 1981 - 82, the following question has been referred for our consideration under section 256(1) of the Income Tax Act, 1961 :

"Whether on the facts and in the circumstances of the case, the assessee which is doing business of running a hotel is entitled to investment allowance under section 32A in respect of the new machinery installed in the previous year relevant to the assessment year 1981-8 ?"

2. The assessee is a hotelier. In respect of certain new machinery installed, the assessee claimed investment allowance under section 32A of the Act. The claim of the assessee was not accepted by the Income Tax Officer and the said view was affirmed by the Appellate Assistant Commissioner. However, the Appellate Tribunal followed its view expressed in another case and held that hotel is an industry entitled to investment allowance.

3. Mr. Raghavendra Rao, learned counsel for the Revenue, strongly relied on the decision of the Kerala High Court to contend that the hotel is a trading concern and not an industrial undertaking. The said decision of the Kerala High Court in Commissioner of Income Tax Vs. Casino (Pvt.) Ltd., (197