TMI Blog2004 (10) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... e to cut and shape the log such sawing machine constitutes a plant for him. Water in the case of the assessee plays same role. Water has to be stored within the ponds. Therefore, the ponds also constitute part of the machinery in the business of the assessee. Learned counsel for the Revenue submitted that it was only a natural pond. It is not correct. – Held that the pond is a plant and hence, entitled to statutory depreciation. - - - - - Dated:- 14-10-2004 - Judge(s) : S. SANKARASUBBAN., PIUS C. KURIAKOSE. JUDGMENT The judgment of the court was delivered by S. Sankarasubban J. - This appeal is filed by the Commissioner of Income-tax, Trivandrum. The assessee is a company doing business in aquaculture. Prawns are grown in speciall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed. The Tribunal held that the prawn pond is a plant. The Tribunal held that the decision reported in Siemens India Ltd. v. CIT [1996] 217 ITR 622 (Bom) cannot be applied in this case. According to the Tribunal, as held by the Bombay High Court, the item would not qualify to be "plant" even if it satisfies the "functional test", if on the application of "premises test" it is found to be used as or part of the premises or place upon which the business was conducted. In that case, a large number of items numbering 74, which included even stools, cycles, storage racks, wooden top, workman tables, etc., were classified by the assessee itself "furniture and fixtures". The assessee later re-classified the above items as "plant" and develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord 'plant' may include building or structure in certain set of circumstances as per the dictionary meaning, to say that a building used for running the business of hotel or a cinema would be 'plant' under the Act would be inconsistent with the provisions of section 32 and the legislative intent." The Supreme Court further held as follows: "There is well-established distinction, in general terms, between the premises in which the business is carried on and the plant with which the business is carried on. The premises are not plant. It is proper to consider the function of the item in dispute. If it functions as part of the premises it is not plant. The fact that the building in which a business is carried on is, by its construction partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pond cannot be treated as plant and is not eligible for depreciation at the rate applicable to plant and machinery. This was stated following the decision in CIT v. Anand Theatres [2000] 244 ITR 192 (SC). In order to keep the water at the required level for the purpose of breeding shrimps or prawns the pond is a must. The breeding of fish cannot be carried on within the ponds. As referred to by the Tribunal, water plays the role of a machine just like a timber merchant. If the timber merchant requires a sawing machine to cut and shape the log such sawing machine constitutes a plant for him. Water in the case of the assessee plays same role. Water has to be stored within the ponds. Therefore, the ponds also constitute part of the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
