TaxTMI 
TaxTMI 
2009 (9) TMI 16
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....laimed depreciation on poultry sheds by treating the same as 'plant'. The Assessing Officer only allowed depreciation treating the poultry shed as 'building' and not as 'plant'. The appeal filed by the assessee was rejected. Thereafter, the assessee approached the Income Tax Appellate Tribunal (ITAT). The ITAT came to the conclusion that the poultry sheds were in the nature of 'plant'. The ITAT relied upon certain judgements of other Bench of the Tribunal to come to the conclusion that a poultry shed is a plant but did not give any reasoning. The only question which requires consideration is whether a 'Poultry shed' is a 'plant' or not. 'Plant' has been defined in Section 43(3). The definition of plant at the relevant time reads as follows: "Plant includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business of profession but does not include tea bushes or livestock." Later on vide Finance Act of 2003 w.e.f. 1.4.2004 the following words were added at the end of the definition:- "Or building or furniture and fittings." In Commissioner of Income-tax, Andhra Pradesh vs. Taj Mahal Hotel, 1971 (Vol.82) ITR, page 44, the Apex Cour....
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....of a Division Bench in R.C. Chemical Industries vs. Commissioner of Income-tax, New Delhi, 1982 (Vol. 134) ITR, page 330, of the Delhi High Court, wherein the Delhi High Court laid down certain principles to decide whether a building is a plant or not. These principles are as follows:- "1. The definition of "plant in S. 43(3) should be given a wide meaning as it is an inclusive definition. 2. All buildings are not "plant" despite the dictionary meaning which includes building; but a building or structure is not per se to be excluded from the ambit of the expression "plant". 3. If the concrete construction or building is used as the premises or setting in which the business is carried on in contradistinction to the fulfilling of the function of a plant, the building or construction or part thereof is not considered a plant. The true test is whether it is the means of "carrying on the business" or the location for so doing. 4. In order, for a building or concrete structure, to qualify for inclusion in the term "plant", it must be established that it is impossible for the equipment to function without the particular type of structure. 5. The particular apparatus or item mus....
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.... the apex Court considered the question whether a building specifically designed and equipped to function as a nursing home should be treated as a plant. The apex Court held that in view of the fact that the assessee's nursing home is equipped to enable the sterilization of surgical instruments and that the building also housed an operation theatre, the same should be treated as a 'Plant'. In CIT, Trivandrum vs. Anand Theatres, (2000) 5 SCC page 393, the question under consideration before the apex Court was whether a building housing a hotel or a theatre is a plant or not. The apex Court decided the question in favour of the revenue by holding as follows:- "In the result, it is held that the building used for running of a hotel or carrying on cinema business cannot be held to be a plant because : (1) The scheme of Section 32 as discussed above, clearly envisages separate depreciation for a building, machinery and plant, furniture and fittings etc. The word 'plant' is given inclusive meaning under Section 43(3) which nowhere includes buildings. The Rules prescribing the rates of depreciation specifically provide grant of depreciation on buildings furniture and fittings machinery....
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....nd there appears no such distinction for grant of allowance on different heads as provided under Section 32 of the Income-tax Act. (7) To differentiate a building for grant of additional depreciation by holding it to be a "plant" in one case where the building is specially designed and constructed with some special features to attract the customers and a building not so constructed but used for the same purpose. Namely, as a hotel or theatre would be unreasonable. "It would be pertinent to mention that this decision was rendered by a Bench of two judges, which distinguished the earlier judgement given in Dr. B. Venkata Rao case, supra, which was also rendered by a Bench of two judges. However, a three Judge Bench of the apex Court in Commissioner of Income-tax vs. Karnataka Power Corporation, 2001 (Vol. 247) ITR, page 268, again considered the question whether a building can be treated as a plant or not. The Court held as follows:- "It is difficult to read the judgement in the case of Anand Theatres (2000) 244 ITR192 (SC) so broadly. The question before the court was whether a building that was used as a hotel or a cinema theatre could be given depreciation on the basis ....