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Issues Involved:
1. Whether the roadways inside the factory premises of the assessee-company come in the category of 'building' and are entitled to depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922. 2. If not, whether the roadways in the factory premises would be entitled to depreciation as 'plant' under section 10(2)(vi) of the Act. Issue-wise Detailed Analysis: 1. Roadways as 'Building': The primary issue was whether the roadways inside the factory premises could be classified as 'building' and hence be eligible for depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922. The assessee, a public limited company, claimed depreciation on the roadways within its factory premises, which were necessary for transporting raw materials and finished products. The Income-tax Officer and the Appellate Assistant Commissioner initially rejected this claim, stating that roadways could not be considered part of the buildings. However, the Tribunal upheld the contention that the roadways formed part of the factory buildings but did not accept that they constituted 'plant'. Mr. Hajarnavis, representing the revenue, argued that roads or roadways could not be regarded as 'buildings' as they lacked the structure or super-structure typically associated with buildings. He cited the Supreme Court case of Commissioner of Income-tax v. Alps Theatre, where it was held that 'building' meant structures and did not include the site. Mr. Kaka, representing the assessee, contended that the term 'building' should be given a broader interpretation to include adjuncts or appurtenances to factory buildings. The court, after considering the arguments, concluded that the roadways linking various factory buildings and used for business purposes must be regarded as 'building' within the meaning of section 10(2)(vi). The court highlighted that the roads were constructed using materials like stones, gravel, and cement, and were necessary for the transport of raw materials and finished products. The court reasoned that these roads, being adjuncts to the factory buildings, would deteriorate over time due to constant use, similar to factory buildings. Therefore, the expenditure on these roads should be considered capital expenditure on buildings, eligible for depreciation. The court distinguished the case from the Supreme Court decision cited by Mr. Hajarnavis, noting that the depreciation in the cited case was claimed on the cost of the land, whereas in the present case, it was claimed on the cost of laying out the roads. The court also referenced the Supreme Court case of Ghanshiam Das v. Debi Prasad, emphasizing that the definition of 'building' could vary depending on the context of the specific legislation. The court rejected Mr. Hajarnavis's argument based on rule 8 of the Indian Income-tax Rules, 1922, which classified buildings into different categories, stating that the classification did not preclude roads from being considered buildings. 2. Roadways as 'Plant': The second issue, whether the roadways could be considered 'plant' for depreciation purposes, was addressed only if the first question was answered in the negative. Since the court affirmed that the roadways could be classified as 'building,' there was no need to address the second question. Conclusion: The Tribunal was justified in holding that the roadways inside the factory premises of the assessee-company come in the category of 'building' and are entitled to depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922. Consequently, the second question regarding roadways as 'plant' did not arise. The revenue was directed to pay the costs of the reference.
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