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TMI Blog2015 (10) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... issue and therefore, they are considered together and are being disposed of by this consolidated order for the sake of convenience. 2. The solitary common issue involved in all these four appeals is whether the assessee is entitled for depreciation at 15% on the Railway siding and channel dredging, being items of plant and machinery or at the rate of 10% being items of building. 3. The assessee in the present case is a company which is engaged in the business of designing, developing, operating and maintenance of Kakinada Deep Water Port. In the returns of income filed for all the four years under consideration, it claimed depreciation at 15% on Railway siding and channel dredging as applicable to the plant and machinery. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al dredging is main facility for operation of port and it is not possible for operation at Port which out this dredging. Hence the facility dredging is considered Plant & Machinery and is eligible for depreciation." 4. The above explanation of the assessee was not found acceptable by the Assessing Officer. According to him, in the business of operation and maintenance of port, railway siding located at port premises was used for the transfer of cargo either to load in ships or unload them by customers. He noted that user charges were being recovered by the assessee for providing such facility and the same being in the nature of payment of rent for using warehouse located in the premises of the port for purpose of storage of goods, the Rail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Rajkot bench of the Tribunal in the case of Kandla Port Trust (supra) and also further gave the following reasons- "7.1 ...It is seen that the expenditure was incurred on dredging the channels required for the ships to reach the shore and occupy the berth. It is noted from the table of rates of depreciation at new Appendix- I that the word "building" includes, roads, projects, culverts, wells and Tube wells. It does not include dredging channels. Further, as can be seen from the definition that there should be a structure to treat any 'construction' as a building. In the case of the appellant, there is no structure but channel is dug for facilitating the movement of ship. The dredging of channel is a continuous process and the wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the said decision of coordinate bench of the Tribunal for assessment year 2006-07, we uphold the impugned order of the learned CIT(A) allowing the claim of the assessee for depreciation at 15% on Railway siding, treating the same as plant. 7. As regards the issue relating to the claim of the assessee for depreciation at 15% on channel dredging being plant, it is observed that a similar claim was made by the assessee in the case of Kandla Port Trust (supra) on wharfs, dry docks, drains, jetties, railways, rolling stock, etc., treating the same as plant and machinery and the same was allowed by the Tribunal for the following reasons given in paragraph No.18 of its order- "18. The next controversy relate to classification of various equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by deployment of these assets accounts for more than 50 per cent of the total income of the port. In CIT v. Dr. B. Venkata Rao (2000) 213 ITR 811 (SC), the assessee, a medical practitioner, ran a nursing home. In respect of the building in which the nursing home was run, the assessee claimed, for the assessment year 1983-84, that it was a Plant. Supreme Court applying functional test allowed assessees claim and held that if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on, it amounted to a Plant. Reference can also be made to Supreme Court decision in case of Scientific Engg. House (R) Ltd v. CIT (1986) 157 ITR 861 (SC), wherein applying ..... X X X X Extracts X X X X X X X X Extracts X X X X
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