TMI Blog2016 (4) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Commissioner of Income-tax while exercising the jurisdiction under Section 263 of the Income-tax Act, 1961, but such order has since been set aside by the Tribunal in its order dated 18.12.2002. Since the order of the Commissioner of Income-tax has been set aside, the order of the Assessing Officer becomes operative. Therefore, keeping in view the finding of the Assessing Officer for the previous two years and applying the functional test, we find that the building which is constructed solely for the manufacturing of medicine is a 'plant' and is entitled to higher depreciation at the rate of 25%. Thus, the question of law is answered in the affirmative in favour of the assessee and against the revenue. - Miscellaneous Appeal No. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of 10% only. Therefore, the excess depreciation claimed was added back. 3. In an appeal preferred against the order of the Assessing Officer, the learned Commissioner of Income Tax (Appeals) rejected the claim of the appellant for depreciation at the rate of 25% after holding that in the earlier orders there was no categorical finding given by the Assessing Officer that the building in question is completely used for manufacture of medicine. However, such order was rectified by the Commissioner of Income Tax (Appeals) on 24.02.2005 and when the assessee produced Assessment Order for the Assessment Years 1997-1998 and 1998-1999 passed under Section 143(3) of the Income Tax Act holding that the building in question is wholly used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x v. ASTRA-IDL Ltd. to contend that the functional test has to be applied to determine whether a particular building was especially designed for the tools of the business, to qualify as plant for higher deprecation at the rate of 25%. It is thus contended that applying the functional test, the assessing officer in two earlier assessment year has held that the building is exclusively constructed for the purpose of manufacture of medicines, therefore, it is plant. Thus there is no reason not to follow the earlier orders passed in the case of assessee alone. 7. On the other hand, learned counsel for the revenue relies upon the judgment reported as [2000] 244 ITR 192 (SC) Commissioner of Income-Tax v. Anand Theatres to contend that buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given depreciation on the basis that it was a plant. The Court held- 6. We find that the judgment dated October 14, 2004, rightly rests this case on functional test and since the ponds were specially designed for rearing/breeding of the prawns, they have to be treated as tools of the business of the assessee and the depreciation was admissible on these ponds. We, thus, decide the question in favour of the assessee and as a consequence, the appeals of the Revenue are dismissed and that of the assessee are allowed. 10. Now coming to the facts of the present case, in the order of assessment for the year 1997-1998, the Assessing Officer has recorded the following finding: I have considered the contention of the assessee. I ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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