2004 (10) TMI 44

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... this court: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in admitting the claim of the assessee for deductions under sections 80HH and 80-I and 32AB of the Income-tax Act, in respect of business of poultry farming? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in admitting the claim of the assessee that the poultry sheds are 'plant' within the meaning of section 43 of the Act?" The assessee, a registered firm has installed a poultry farm in village Mauli, District Ambala. The assessee filed a return of income for the assessment year 1988-89 declaring nil income. The assessee claimed deductions under sections 80HH, 80-I and 32AB of the A....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....history of the provisions of the Act, it is abundantly clear that those who are engaged in the business of hatcheries are neither industrial undertakings nor engaged in the business of producing articles or things." In view of the above, we hold that the Tribunal erred in law in admitting the claim of the assessee for deductions under sections 80HH, 80-I and 32AB of the Act in respect of the benefits of poultry farming. Accordingly, this question is answered in favour of the Revenue and against the assessee. Now, adverting to the second question, it may be mentioned that the assessee had claimed that the poultry sheds are plant and not buildings and therefore, it was entitled to depreciation at 33.3 per cent. as is admissible on machi....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....siness is carried on. If a building is merely a setting or place to accommodate some apparatus, then that cannot be termed as plant but if that plays an important role in carrying on the business then it will fall within the definition of the term "plant". It would be a plant if it is a tool of the trade with which one carries on his business. The poultry shed cannot be considered as an apparatus or tool for running the poultry business but is merely a shelter or home or setting in which the business is carried on. Thus, the poultry shed cannot be termed as plant but would fall under the term "building". The question before the Supreme Court in Anand Theatres' case [2000] 244 ITR 192 was whether a building being used for running a hotel ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....R 62, decided by the House of Lords pertains to a dry dock yard which itself was functioning as a plant that is to say, structure for the plant was constructed so that dry dock can operate. It operated as an essential part in the operations which took place in getting a ship into the dock, holding it securely and then returning it to the river. The dock as a complete unit contained a large amount of equipment without which the dry dock could not perform its function. (5) Even in England, courts have repeatedly held that the meaning of the word 'plant' given in various decisions is artificial and imprecise in application, that is to use the words of Lord Buckley, 'it is now beyond doubt that the word "plant" is used in the relevant sectio....