Functional test for depreciation: specially designed storage platforms treated as plant, not buildings, for business use.

Open plinth godowns and platforms specially designed for foodgrain storage were treated as plant, not ordinary buildings, because the functional test showed they operated as an apparatus or tool integral to the assessee's trading activity. Their temporary erection, specific storage design, and use for providing storage capacity rather than as premises let out for rent supported plant classification. Depreciation was therefore allowable on that basis, and not as building depreciation. The reference was answered against the Revenue and in favour of the assessee on the character of the structures for depreciation purposes.

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Issues: Whether the open plinth godowns/platforms used for storage of foodgrains were plant or building for the purpose of depreciation.

Analysis: The determination turned on the functional test and the inclusive width of the definition of plant. The structures were erected to meet specific design and storage requirements, for a limited duration, and for use in the assessee's trading activity of providing storage capacity rather than as ordinary premises let out to earn rent. On that factual foundation, the platforms performed the function of an apparatus or tool in the business and could not be treated as mere buildings.

Conclusion: The open plinth godowns were plant and depreciation was allowable accordingly, not as ordinary building depreciation.

Final Conclusion: The reference was answered against the Revenue and in favour of the assessee on the characterization of the open plinth structures for depreciation purposes.

Ratio Decidendi: Where a structure is specially designed, temporarily erected, and used as an integral tool of the assessee's trading operations, its character is determined by the functional test and it may be treated as plant for depreciation.

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