9911796707
TMI Blog1983 (2) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... 979, it had revised its loss to Rs. 17,703 by filing another return. The assessment was completed and the total loss was computed at Rs. 15,320 by the ITO. During the course of the assessment proceedings, the assessee-firm claimed investment allowance under section 32A(1) of the Income-tax Act, 1961 (' the Act '), at 25 per cent on a total sum of Rs. 1,45,433, the break up of which is as follows : Rs. Cost of machinery as per account furnished 32,341 Electric fittings relating to machinery as per account furnished 9,440 Plant and shed as per account furnished 1,03,652 ---------------------- 1,45,433 ---------------------- The claim of the assessee was that the investment allowance was allowable on assets described as plant and shed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to include building or shed, according to the AAC it makes no sense, inasmuch as it would be quite inappropriate that the building and shed would be installed. Therefore, he dismissed the appeal. 4. Further aggrieved by the impugned order of the AAC, the matter was brought in second appeal to the Tribunal and, thus, it stands for our consideration. A paper compilation was filed before this Tribunal on behalf of the assessee. One of the papers contained therein is the letter dated 20-2-1981 addressed by the assessee to the ITO, explaining as to why the shed in question should be considered to be part of the plant. It is explained as follows : " The plant in question is the super-structure raised on ground with walls to a height of 14 fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere installed on RCC columns with the support of walls and its pulleys are connected with counter-shafts rested on RCC blocks placed in opposite directions and because while the manufacturing process commences, the whole of the shed is subjected to substantial vibration and is liable to wear and tear and by applying the functional test adumbrated by the learned authors quoted above, we hold that the shed is used as an apparatus with which the business is carried on and, hence, it should be considered to be a plant. In support of our finding, we rely upon the decision rendered by the Madras High Court in Addl. CIT v. Madras Cements Ltd. [1977] 110 ITR 281. In that case, the Madras High Court was considering whether the special reinforced fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in CIT v. Caltex Oil Refining (I) Ltd. [1976] 102 ITR 260 construed the fencing around the oil refinery as plant. It also took note of another Bombay case in CIT v. Union Bank of India Ltd. [1976] 102 ITR 270, where the safe deposit vault has similarly been taken as coming within the scope of the word ' plant '. We also come across the decision of the Delhi High Court as in the case of CIT v. Pure Ice Cream Co. [1981] 129 ITR 394, in which the whole of cold storage room which was an essential part of the machinery and without which the machinery could not effectively work and ice cream could not be produced was construed as a plant. So also the platform for machines, observation tower, cooling tower, etc., were treated as plants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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