Depreciation on roads appurtenant to buildings recognised for refinery and housing-colony assets under income-tax law.

Roads within refinery premises, including inter-connecting roads and the boundary-wall road, were treated as part of the wider concept of "building" for depreciation purposes, following the existing Colour-Chem Ltd. principle. Roads inside housing colonies were also held to be appurtenant to the colony buildings, so they qualified for depreciation as part of the buildings. The alternative contention that such assets constituted plant was treated as academic. The governing principle stated is that roads adjunct to and appurtenant with a building may be depreciable as part of that building under income-tax law.

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Issues: (i) Whether inter-connecting roads and the road running along the boundary wall of the refinery premises were includible within the scope of "building" for the purpose of depreciation. (ii) Whether the roads inside the housing colonies were appurtenant to the buildings in those colonies and therefore entitled to depreciation as part of the building.

Issue (i): Whether inter-connecting roads and the road running along the boundary wall of the refinery premises were includible within the scope of "building" for the purpose of depreciation.

Analysis: The issue stood covered by the existing decision of the Court in Colour-Chem Ltd., on the basis of which the reference was answered. The roads within the refinery premises were treated as falling within the wider concept of building for depreciation purposes.

Conclusion: In favour of the assessee; the question was answered in the affirmative.

Issue (ii): Whether the roads inside the housing colonies were appurtenant to the buildings in those colonies and therefore entitled to depreciation as part of the building.

Analysis: The buildings in the housing colonies were accepted as business assets entitled to depreciation. Applying the test whether the roads functioned as adjuncts to or were appurtenant to those buildings, the roads inside the housing colonies were held to be appurtenant thereto.

Conclusion: In favour of the assessee; the question was answered in the negative.

Final Conclusion: The reference was disposed of by answering the decided questions in accordance with the assessee's claim on the principal issue and the housing-colony roads issue, with the alternative plant contention treated as academic.

Ratio Decidendi: Roads that are adjuncts to and appurtenant with a building may be treated as part of the building for depreciation purposes under the income-tax law.

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