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M/s Cachet Pharmaceuticals Pvt. Ltd. Versus Commissioner of Income Tax-1, Patna, Dy. Commissioner of Income Tax

Higher depreciation at the rate of 25% on factory building - Held that:- In the order of assessment for the year 1997-1998, the Assessing Officer has recorded the following finding that as have gone through the maps and photographs and also functional use of the building and decisions. Considering all these facts and circumstances there is no doubt that the factory building is plant of the assessee. It qualifies for depreciation @ 25%. - The said stand of the assessee was accepted in the sub .....

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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. 405 of 2007 - Dated:- 16-3-2016 - Hemant Gupta And Ramesh Kumar Datta, JJ. For the Appellant : Mr. Ajay Kumar Rastogi, Adv. and Mr. Parijat Saurav, Adv For the Respondents .....

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of 2007 1. The assessee is in appeal under Section 260A of the Income Tax Act, 1961 against an order passed by the Income Tax Appellate Tribunal, Patna Bench, Patna (for short, 'the Tribunal') on 13th of April, 2007, arising out of I.T.A. No. 240/Pat. 2005, pertaining to Assessment Year 1999-2000. 2. The assessee filed its return on 3rd of December, 1999 showing total income of ₹ 1,10,26,490/-. The return was processed under Section 143(1)(a) of the Act. However, the learned Asses .....

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ed 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 .....

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63 of the Income Tax Act in respect of the Assessment Years 1997-1998 and 1998-1999; meaning thereby that the order of assessment, as originally framed for the Assessment Years 1997-1998 and 1998-1999, stands restored. 5. This Court has framed the following substantial questions of law:- Whether on the facts and in the circumstances of the case, the claim of the assessee that the building which houses the manufactory is a plant within the meaning of Section 43(3) of the Income Tax Act, 1961 and .....

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ommissioner of Income-Tax 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 ther .....

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within the category of 'building' cannot be considered to be 'plant'. Buildings with particular specification for atmospheric control like moisture or temperature are not 'plant'. In order to find out as to whether a particular item is a plant or not, the meaning which is available in the popular sense, i.e., the people conversant with the subject-matter would attribute to it, has to be taken. The building in which the business is carried on cannot be considered to be a .....

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iation on the basis that it was a 'plant' and it was in relation to that question that the Court considered a host of authorities of this country and England and came to the conclusion that a building which was used as a hotel or cinema theatre could not be 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 t .....

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