TMI Blog1974 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. The assessee is a public limited company carrying on business in the manufacture and sale of pigments, pigment emulsion, distempers and other chemicals, dyes, etc. In the assessment proceedings for the assessment year 1961-62, the company claimed depreciation allowance on the roadways inside the factory premises of the company. It appears that the factory is situate on land admeasuring 25 acres and the company had spent a sum of Rs. 1,85,649 on the layout of the roads inside the factory premises linking the various factory buildings. The cost of the roads was included in the figures relating to buildings, and depreciation was claimed at the rate of 2 1/2% on the cost of the roads at the same rate as applicable to buildings. The assessee-company claimed depreciation allowance on the ground that the roads were of concrete and were necessary for transport of raw materials and finished products. The Income-tax Officer rejected the claim for depreciation holding that the roadways could not be considered as part of the buildings. The Appellate Assistant Commissioner agreed with this view. In the further appeal that was carried to the Tribunal an alternative contention was also raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion thereon by suggesting that the roads or roadways constitute " buildings " cannot succeed, for, the normal concept of a building or buildings is referable to something that is constructed as a structure or superstructure on land and, therefore, no depreciation allowance can be allowed in respect of the roadways that have been laid out by the assessee-company in its factory premises. He further pointed out that the expression " building " has not been defined in the Act and, therefore, the ordinary dictionary meaning of the expression will have to be taken into account and, according to the Shorter Oxford Dictionary, the expression " building " means " that which is built ; a structure ", and ordinarily any structure in its popular sense would mean a structure which has walls and a roof and in this sense the roadways constructed by the assessee-company cannot be regarded as failing in the category of building or buildings specified in sub-clause (vi) of section 10(2). He also relied upon a decision of the Supreme Court in the case of Commissioner of Income-tax v. Alps Theatre [1967] 65 ITR 377 (SC). He pointed out that in that case the expression " building " occurring in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 10(2) of the Act. It was not disputed that over the land which formed the base, materials such as stones, gravel, cement and other things were used for the purpose of constructing such roads or roadways within the factory premises and it was also not disputed that these roads are of concrete and are necessary for the transport of raw materials and finished products. It would be pertinent to mention that the expenditure incurred was in the nature of capital expenditure incurred by the assessee-company since they had laid out these roads for the first time to enable the assessee to carry on its business ; moreover, it cannot be disputed, these roads or roadways will have to be regarded as adjuncts of the factory buildings or things appurtenant to the factory buildings since these link the various factory buildings lying within the premises and are used for carrying raw materials or finished products. Like factory buildings these roads or roadways which are appurtenant thereto will also deteriorate by reason of constant use to which they are being put in carrying on the business. Having regard to the context of the particular subject-matter dealt with by the relevant provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entirely different from the facts that obtained in the Supreme Court case and, therefore, the ruling relied upon by Mr. Hajarnavis is clearly inapplicable. Mr. Hajarnavis then relied upon another decision of the Supreme Court in the case of Ghanshiam Das v. Debi Prasad AIR 1966 SC 1998, 2000, where a brick-kiln with no walls and no roof but which was a mere pit dug in the ground with bricks by its side was held to be no building within the meaning of section 9 of the U. P. Zamindari Abolition and Land Reforms Act. Their Lordships relied upon the definition of building given in the Webster's New International Dictionary and observed as follows : " From this definition it does not appear that the existence of a roof is always necessary for a structure to be regarded as a building. Residential buildings ordinarily have roofs but there can be a non-residental building for which a roof is not necessary. A large stadium or an open-air swimming pool constructed at a considerable expense would be a building as it is a permanent structure and designed for a useful purpose. The question as to what is a " building " under section 9 of the Act must always be a question of degree--a questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to some sort of structure which could be regarded as either a first class structure or a second class structure or a temporary erection for which different rates of depreciation are prescribed and roads or roadways with which we are concerned in the case cannot be classified into any one of the four categories mentioned in rule 8 and according to Mr. Hajarnavis, this also indicates that the roads or roadways for which depreciation allowance is claimed by the assessee-company cannot come within the category of the specified asset or building mentioned in sub-clause (vi) of section 10(2). It is not possible to accept this submission of Mr. Hajarnavis for more than one reason. In the first place, the question whether the roads or roadways for which depreciation allowance has been claimed by the assessee-company amount to building or buildings will have to be decided by reference to the specific provisions of section 10(2) and not by reference to the provision which is contained in the rule which prescribes different rates of depreciation allowance. Moreover, it is not understood as to why roads or roadways cannot be classified into one or the other of the categories indicated in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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