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TMI Blog1983 (8) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ars. The assessee appealed to the Commissioner (Appeals). He held that the kiln is part of the factory building but constructed with certain modifications so as to withstand the heat in the baking process, but this itself would not entitle it to be called plant. The kiln is nothing but a factory building. Thus, he confirmed the assessments in both the years. Against the said order, the assessee has preferred these appeals. 2. The learned counsel strongly urged that the kiln is an apparatus in which tiles and ridges are baked. Hence, it is a plant. The lower authorities were wrong in treating it as a factory building. He relied on the decisions in CIT v. Kanodia Warehousing Corpn. [1980] 121 ITR 996 (All.) and Addl. CIT v. Dyer's Stone Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of 'plant' in section 10(5) of the Indian Income-tax Act, 1922 the Supreme Court observed as under : "Now it is well settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means 'that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it'. In the present case, section 10(5) enlarges the definition of the word 'plant' by including in it the words which have already been mentioned before. The very fact that even books have been included shows that the meaning intended to be given to 'plant' is wide. The word 'includes' is often used in interpretation clauses in order to en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilding. It is an apparatus used by the assessee for the purpose of baking tiles and ridges. In order to decide whether kiln constitutes 'plant' or not, the functional test has to be applied. If the building or apparatus is employed in carrying on the activity of the business then it shall be treated as plant even though it consisted of some structure or building. It has to be seen whether it constituted an apparatus or tool of the assessee or whether it is merely a place where he carries on his business. If it is an apparatus with which the business is carried on, it is a plant. But, if it merely constitutes a place within which the business is carried on, it can not be regarded as a plant. In the instant case, the kiln where tiles and ridg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eristics of plant can be clearly gleaned. The word 'plant', in its ordinary meaning, is a word of wide import and in the context of section 32 it must be broadly construed. It includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business. It is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. It would not, however, cover the stock-in-trade, that is, goods bought or made for sale by a businessman. It would also not include an article which is merely a part of the premises in which the business is carried on as distinguished from a part of the plant with which the business is carried on. An art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the plant used for air-conditioning the assessee's cold storage and the assessee would be entitled to depreciation at 15 per cent. In CIT v. Caltex Oil Refining (India) Ltd. [1979] 116 ITR 404 the Bombay High Court held that the fencing round the refinery processing units constituted 'plant' so as to be entitled to depreciation and development rebate. In CIT v. Warner Hindustan Ltd. [1979] 117 ITR 15 the Andhra Pradesh High Court held that the definition of 'plant' in section 43(3) is of wide amplitude so as to take in even a well, provided that the well was dug for the purpose of carrying on the business of the assessee. This decision was followed again by the same Court in CIT v. Warner Hindustan Ltd. [1979] 117 ITR 68. In CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyed in carrying on the activity of the business, then it shall be treated as a plant and if it does not constitute a part of the apparatus employed in carrying on the activities of the business, then it cannot be regarded as a plant. It was further held that it is to be seen whether it constituted an apparatus or a tool of the trade of the taxpayer or it is merely a space where the assessee carries on his business. If the building, structure or a part thereof is something by means of which the business activities are carried on, it would amount to a plant but where the structure plays no part in the carrying on of those activities but merely constitutes a place within which they are carried on, it cannot be regarded as a plant. In that cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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