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TMI Blog2009 (9) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of Section 43(3), as it then stood. X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of "plant". In decided cases, the High Courts have rightly understood the meaning of the term "plant" in a wide sense. (See Commissioner of Income-tax v. Indian Turpentine and Rosin Co. Ltd.) In Commissioner of Income-tax, Gujarat-III vs. Mc GAW Ravindra Laboratories (India) Ltd. 1981 (Vol 132) ITR, page 401, the question raised before the Gujarat High Court was whether the expenditure incurred for cost of preparing and providing additional specifications for analysis and testing of raw materials and for providing production methods was a 'plant' and also whether roads were a 'plant'. Following the test laid down by the apex Court, the Gujarat High Court held that whereas the expenditure incurred on preparing and providing additional specification for analysis would be 'plant', the amount spent on construction of the road would not be a plant because it was not shown by the assessee that the road was of particular type so as to become part of the 'plant'. Reliance has been placed by the revenue on a judgement of a Division Bench in R.C. Chemical Industries vs. Commissioner of Income-tax, New Delhi, 1982 (Vol. 134) ITR, page 330, of the Delhi High Court, wherein the Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smaller cages was, therefore, treated to be no better than the individual components of an engine. The apex Court again considered the question as to what meaning should be given to the word 'plant' in Scientific Engineering House Pvt. Ltd. Vs. Commissioner of Incometax, Andhra Pradesh, 1986 (Vol. 157) ITR, page 86. It was held that even drawings, designs, charts, plans, processing data and other literature comprised in the documentation service constituted a book and therefore, fell within the definition of a plant. The Court held that purpose of rendering such documentation service by supply of the documents to the assessee was to enable it to undertake its trading activity. It was held that these documents had a vital function to perform in the manufacture of the instruments and, therefore, even though the documents did not perform any mechanical operations or process they still fall within the definition of 'plant'. In Commissioner of Income-tax vs. Dr. B.Venkata Rao, 2000 (Vol. 243) ITR, page 81, the apex Court considered the question whether a building specifically designed and equipped to function as a nursing home should be treated as a plant. The apex Court held that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edly held that the meaning to the word 'plant' given in various decisions is artificial and imprecise in application, that is to use the words of Lord Buckley, "it is now beyond doubt that the word 'plant' is used in the relevant section in an artificial and largely Judge-made sense." Lord Wilberforce commented by stating that "no ordinary man, literate or semi-literate, would think that a horse, a swimming pool, moveable partitions, or even a dry-dock was plant." (6) For the hotel building and hospital in the case of Carr v. Sayer, (65 Tax Cas 15) (supra) it has been observed that a hotel building remains a building even when constructed to a luxury specification and similarly, a hospital building for infectious diseases which might require a special layout and other features also remains a premises and is not plant. It is to be added that all these decisions are based upon the interpretation of the phrase 'machinery or plant' under Section 41 of the Finance Act, 1971 which was applicable and there appears no such distinction for grant of allowance on different heads as provided under Section 32 of the Income-tax Act. (7) To differentiate a building for grant of additional depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. Therefore, there is a wide scope for including in the definition many items. It is clear that the legislature by including, ships, vehicles, and books in the definition of plant, had widened the scope of the word 'plant'. As noted above, now the legislature has stepped in and specifically excluded buildings from the definition of the word 'plant'. This itself indicates that prior to the exclusion with effect from 1.4.2004, buildings if specifically constructed and falling within the guidelines of the various authorities referred to here-in-above could be treated as 'plant'. The various authorities referred to above also indicate that a very wide amplitude has been given to term 'plant'. The definition of 'plant' engulfs within its ambit many diverse subjects, such as, ships sailing on the high seas, books used by lawyers or engineers and scalpels used by doctors. In Nowrangroy Metals Pvt. Ltd. Vs. Joint Commissioner of Income-tax (Assessment) 2003 (Vol 262) ITR, page 231, the Division Bench of the Gauhati High Court held that a mill building specially constructed for the purpose of housing a mill is a 'plant within the meaning of Sections 32, 43(3). In Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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