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TMI Blog2003 (6) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... tible on such payment. 3. The Assessing Officer observed that the two assessees had used part of the property owned by M/s. Vinayak Cold Storage (VCS for short) by keeping their goods in the said cold storage. In consideration thereof, the assessees had made following payments to VCS:-- Ganesh Alu Bhandar Ashokkumar Narandas & Co. Asst. Year Asst. Year Asst. Year Asst. Year 1998-99 1999-2000 1998-99 1999-2000 Rs.7,90,209 Rs.7,54,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; Asst. Year Asst. Year Asst. Year 1998-99 1999-2000 1998-99 1999-2000 (Rs.) (Rs.) (Rs.) (Rs.) Ganesh Alu 1,58,042 1,51,200 51,350 24,460 Bhandar Ashokkumar 93,920 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression "manufacturing process" as defined in section 2(k) of the Factories Act was referred to which, inter alia, meant "preserving or storing any article in cold storage". It was pointed out that special permission for construction of cold storage was required specifying therein the foodstuff to be stored from the Directorate of Marketing & Inspection, Ministry of Agriculture. Similarly, licence under the Cold Storage Order, 1980 was also required. In short, it was contended that what was paid were preservation charges and not rent and hence section 194-I was not applicable. Reliance was placed on the decision of the Punjab & Haryana High Court in the case of CIT v. Yamuna Cold Storage [1981] 129 ITR 728. Several other decisions were also relied upon listed on page 9 of the paper-book in support of the contention that cold storage was a plant. 6. The learned DR, supporting the orders of the lower authorities, submitted that the definition of the term "rent" given in section 194-I was widely worded and hence the case of the assessee definitely fell within its purview. 7. We have duly considered the rival contentions and the material on record. First, we would like to refer t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic examination might indicate loss of moisture content, that is not sufficient for holding that the stored articles have undergone a process within the meaning of section 2(7)(c) Finance Act, 1973. The three-judge Bench decision must be taken to have overruled the view of the Allahabad High Court in Addl. CIT v. Farrukhabad Cold Storage [1977] 107 ITR 816 and that of the Calcutta High Court in CIT v. Radha Nagar Cold Storage (P) Ltd. [1980] 126 ITR 66." Thus, so far as tax laws are concerned, the issue is well settled that storing of goods in a cold storage does not amount to processing in view of the aforesaid decision of the Supreme Court. At this juncture, it may bi mentioned that the Supreme Court has nowhere mentioned in its decision that cold storage is not a building as has been contended by the assessee on page 3 of its paper- book. Further, before we part with this aspect of the matter, it will not be out of place to refer to the definition of the term "manufacturing process" as defined in section 2(k) of the Factories Act. The relevant sub-clauses read as follows: "(k) "manufacturing process" means any process for-- (i) making, altering, repairing, ornamenting, finishi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e now need to address is, - whether cold storage can be called a plant despite the fact that no manufacturing or any other process is carried on therein. There are numerous Tribunal and High Court decisions wherein cold storage has been held to be a plant. The Tribunal decisions where such a view is taken are as follows: 1. Garg Cold Storage v. ITO [1985] 21 TTJ (All.) 425 2. Girdhar Refrigeration & Cold Storage [IT Appeal Nos. 2338 and 2339 (All.) of 1977-78 dated 30-6-1979] 3. Manipuri Ice & Cold Storage Co. [IT Appeal No. 1488 (All.) of 1982] 4. Sardar Waryam Singh Cold Storage [IT Appeal No. 115 (Asr.) of 1982 dated 24-3-1983] 5. Nand Lal Cold Storage [IT Appeal No. 3979 (Delhi) of 1982 dated 27-4-1984]. The Allahabad High Court in the case of CIT v. Kanodia Cold Storage [1975] 100 ITR 155 held as follows: "In common parlance the word 'plant' includes within its ambit buildings and equipment used for manufacturing purposes. The definition of 'plant' in section 43(3) is inclusive and does not exclude things normally included in it. Where a building with insulated walls is used as a freezing chamber, though it is not machinery or part thereof, it is part of the air-conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... storage is a plant. 11. Having held that a cold storage is a plant, the question that remains to be addressed is whether section 194-I is applicable to it. Section 194-I defines "rent" as any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee. The definition does not include any payment made for the use of a plant, which a cold storage is, as has been held in the earlier paras. Thus, when the term "plant" is specifically excluded from the definition, there is no question of applying section 194-I for payment made for the use of cold storage. There may be a temptation on the part of revenue authorities to treat it as a building, though it may be a specialized building. However, in view of specific connotations ascribed to building and plant in the Act, we are not inclined to accept this proposition. At best, it may be called a structure. But as had been observed by the Supreme Court in the case of Municipal Corpn. of Greater Bombay v. India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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