TMI Blog2000 (11) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal is correct in law in holding that the 'pharma building' should be considered as a 'plant' for the purpose of allowance of depreciation under the provisions of the Income-tax Act, 1961 ? (b) Whether, on the facts and circumstances of the case, the Tribunal is justified in holding that the 'pharma building' in the respondent-assessee's case requires to be considered as 'plant' on the basis of the view as expressed in the report of the District Valuation Officer ?" Shortly stated, the facts are : The respondent-assessee (for short, "the assessee") is a company incorporated under the Companies Act and is engaged in the business of manufacturing and selling of pharmaceutical, medical, medicinal preparations. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Commissioner of Income-tax (Appeals). The appeal was accepted and the appellate authority directed the assessing authority to treat the "Pharma building" as a plant and to allow the claim of the assessee for higher rate of depreciation. Against the order of the Commissioner of Income-tax (Appeals), the Revenue filed an appeal before the Tribunal. The Tribunal directed the Departmental representative to cause an inspection of the building by an engineer of the Department and to file a report regarding the specification of the building. Subsequently, a report was filed by the District Valuation Officer. The Tribunal, applying the decision of the High Court in the case of CIT v. Dr. B. Venkata Rao [1993] 202 ITR 303 (Kar) coupled wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings . ., etc.' Therefore, whenever a question comes up before the court as to the status of a building, straightaway it cannot be held as not a 'plant'. A wide meaning is attributed to the term 'plant' because of the functional test." The judgment of this court was affirmed by the Supreme Court in the case of CIT v. Dr. B. Venkata Rao [2000] 243 ITR 81 and it was held : " The most apposite decision in this context is that delivered by the Allahabad High Court in S. K. Tulsi and Sons v. CIT [1991] 187 ITR 685. Reference was made to an earlier judgment, where also the functional test approved by this court in several decisions was applied. It was held that if it was found that the building or structure constituted an apparatus or a tool ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e top ground floor roof. The opening of the RCC roof slab permits passage for cool air in the entire building. The building is also having six halls for the utility of staff welfare like canteen, kitchen, dining hall, etc. It was certified that the utility of the pharma building was only for manufacturing and supplying medicine and no other business is being run by the assessee. We are satisfied that the building put up by the assessee was being used for manufacture of medicines and was nothing but a plant. It constituted an apparatus and a tool for the assessee by means of which business activities were being carried out. For the reasons stated above, we dismiss the appeal and answer the questions in the affirmative, i.e., against th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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