Functional test for depreciation: nursing home building treated as plant because it played an active role in medical treatment.

A nursing home building used for medical treatment and ancillary clinical facilities was treated as a plant under the functional test for depreciation. The reasoning was that the building was not a mere passive structure but formed part of the operative apparatus of the medical business, housing equipment, instruments, sterilisation facilities and related treatment functions. A building is not excluded from the meaning of plant simply because it is a building where it itself performs an active role in the profession. The assessee was therefore entitled to enhanced depreciation at ten per cent.

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Issues: Whether a nursing home building used for medical treatment and ancillary facilities is a "plant" for the purpose of depreciation under section 32 of the Income-tax Act, 1961.

Analysis: The claim for enhanced depreciation turned on whether the building was merely a structure or had to be treated as plant under the functional test. A nursing home is not an ordinary building, since it is used for treatment and houses equipment, instruments, sterilisation facilities, and other medical functions. A building cannot be excluded from the concept of plant merely because it is a building, and the term plant is to be given a wide meaning where the building itself performs an operative role in the business or profession.

Conclusion: The nursing home building was held to be plant, and the assessee was entitled to depreciation at ten per cent.

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