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of <h1>High Court rules buildings housing egg-laying hens not qualified for factory depreciation allowance.</h1> <h3>Siddharth Agencies Versus Commissioner Of Income-Tax</h3> The High Court ruled in favor of the Revenue, determining that the buildings housing hens for egg production did not qualify as factory buildings for ... Depreciation, Factory Buildings Issues: Whether the building housing hens producing eggs qualifies as a factory building for higher depreciation allowance.Analysis:The High Court analyzed the issue of whether the building where eggs are produced by hens qualifies as a factory building for the purpose of allowing higher depreciation. The court noted that eggs are a result of a natural biological process and not an article of manufacture. The owner of the building merely provides feed and maintains the health of the poultry, without contributing to the production process itself. The court referred to previous judgments to define a factory as a place where goods are manufactured or processed, including ancillary operations. It cited a case where a canteen in an industrial undertaking was considered a factory building for depreciation purposes.The court also referenced a Supreme Court case regarding a hatchery claiming to be an industrial undertaking. The Supreme Court observed that the hatchery did not contribute to the formation of chicks, which was a natural biological process. Similarly, the production of eggs was deemed an event of nature, not a result of manufacturing or processing by the hatchery owner. The court concluded that the buildings housing hens cannot be considered factory buildings for higher depreciation allowance.In another case, the court considered whether housing chicks in buildings caused wear and tear similar to factory buildings. It was determined that housing chicks did not impose the same stress on buildings as machinery or canteen kitchens in a factory. Consequently, the court held that the buildings housing hens for egg production did not qualify as factory buildings for higher depreciation allowance.Ultimately, the court ruled in favor of the Revenue, stating that the buildings of the assessee were not eligible for depreciation at the higher rate. The judgment clarified that since the hatchery was not an industrial undertaking and the eggs were a natural product, the buildings could not be classified as factory buildings for depreciation purposes.
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