Revenue's appeal dismissed; assessee entitled to investment allowance on generating station building recognized as a plant.

The SC dismissed the Revenue's appeal, upholding the HC's decision in favor of the assessee on all three questions. The SC affirmed the assessee's entitlement to investment allowance on the generating station building, recognizing it as a plant due to its integral role in the generating system. The Court distinguished this case from prior judgments by focusing on the building's fulfillment of the assessee's special technical requirements. Consequently, the appeal was dismissed, with no order as to costs.

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The Supreme Court considered an appeal by the Revenue against a High Court decision in favor of the assessee on three questions. The first two questions were answered affirmatively in favor of the assessee based on relevant case law. The remaining issue concerned the entitlement of the assessee to investment allowance on the generating station building, treated as a plant for the purposes of investment allowance.The assessee argued that various components of the generating station building, such as transformer foundation, cable duct system, outdoor yard structures, and tail race channel, were essential parts of the generating plant's special engineering works. The Commissioner and subsequent authorities accepted this argument, allowing investment allowance on the generating station building.The Revenue referenced a previous judgment regarding the distinction between a building and a plant, arguing that the generating station building should not be considered a plant for investment allowance purposes. However, the Court distinguished the previous case, emphasizing that the critical factor is whether the building serves the assessee's special technical requirements.The Court found that the generating station building was an integral part of the generating system, meeting the criteria to be considered a plant for investment allowance purposes. Therefore, the third question was answered in favor of the assessee.In conclusion, the civil appeal was dismissed, with no order as to costs.

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