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TMI Blog1995 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... t and machinery costing Rs. 9,04,922 after excluding cost of poultry shed No. 1 at Rs. 2,89,701. Depreciation on the poultry shed was allowed @ 5% only treating the same as building. Investment allowance was not allowed in any of the four assessment years either on the poultry sheds or on the water-line sheds. The assessee went in appeal but failed. 4. The learned counsel for the assessee has submitted that poultry sheds were very much in the nature of plant because the shed constituted an apparatus/tool for the assessee and was not merely a space. The nature and type of construction was very much different so far as a poultry shed was concerned and, therefore, it was unlike any other building. It was contended that the word " plant " must be broadly construed having regard to the fact that technical specifications and details like the provision for proper light and air, scientific feeding arrangements, proper watering system, proper arrangement for collection of manure and droppings, arrangement for medication and vaccination, etc., have to be kept in view because these factors were of paramount importance. A poultry shed is specially designed from technical point keeping in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in this respect. In the case of Patel Enterprises v. ITO [1986] 15 ITD 114, the Ahmedabad Bench of the Tribunal held that theatre building has to be treated as plant for purpose of depreciation allowance. In the case of Bhagya Laxmi Hatcheries P. Ltd [IT Appeal Nos. 569 and 570 of 1988] the Hyderabad Bench held that poultry sheds and hatchery buildings have to be treated as plant within the meaning of section 43(3) of the Act. The Bombay Bench also took the same view in the case of Deccan Poultry Industries [IT Appeal No. 4046 of 1982], vide its order dated 28-4-1984. The Chandigarh Bench had also an occasion to examine a similar issue is the case of Sudarshal Lal [IT Appeal No. 1431 of 1993] and, vide order dated 31-1-1994, poultry shed was held to be in the nature of a plant. While examining the issue, the Tribunal took note of the decision of the Andhra Pradesh High Court in CIT v. Sri Venkateswara Hatcheries (P.) Ltd [1988] 174 ITR 231. Two earlier orders of the Tribunal, one in the case of Gurprit Singh [IT Appeal No. 743 of 1984, dated 11-5-1987] and the other in the case of Sandeep Poultry Farma [IT Appeal No. 611 of 1988, dated 4-3-1993] were also looked into. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut into use without a protective fencing, such fencing could be regarded as a part of the processing unit. There was considerable degree of durability to the fencing and, therefore, the fencing surrounding the refinery processing units should be regarded as part of the plant. In the case of CITv. Union Bank of India Ltd [1976] 102 ITR 270 (Bom.), the same High Court again examined a similar question and held that a safe deposit vault in a bank was an apparatus or fixture employed in carrying on a trade or business which is not its stock-in-trade and would fall within the meaning of " plant ". The Madras High Court has in the case of Addl CIT v. Madras Cements Ltd [1977] 110 ITR 281 also held the same view while examining the definition of " plant " in section 43 (3). It has been observed in that case that the expression " plant " has to be construed in the context of particular kind of trade or manufacture. The dictionary meaning of the word " plant " apprehends buildings employed in carrying on trade or the other industrial business. Special reinforced concrete foundation for the purpose of locating or installing the rotary kiln in the factory was, therefore, held to be " plant ". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the water-line sheds definitely fell within the definitions of " plant " under section 43(3) of the Income-tax Act. The learned counsel has conceded that water-line in the residential quarters would not qualify for this purpose and, therefore, he would not press assessee's claim for depreciation and investment allowance at higher rate in respect of water-line in the residential quarters. 7. The learned Departmental Representative has, in reply, submitted that a poultry shed could not be distinct from a factory shed and, therefore, there was no justification to treat a poultry shed as a plant. A factory building is also designed as per specifications and requirements and the factory sheds are also constructed for carrying on the manufacturing activity. Reliance has been placed by the learned Departmental Representative on the decision of the Supreme Court in the case of Scientific Engg. House P. Ltd. v. CIT [1986] 157 ITR 86. That was a case where various documents such as drawings, designs, charts, plans, processing data and other literatures were claimed to be part of plant. While examining the question, it was observed that in order to qualify as plant, the particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd machinery used by the concern. The learned counsel has argued that in the light of the Board's circular, ESA has to be allowed on concern basis and there was no justification to treat the fencing as part of the plant but not to allow ESA. So far as the question of ESA on poultry shed is concerned, it is pointed out that once the poultry shed is held to be plant, ESA has to be allowed on it. 10. The learned Departmental Representative has, in reply, contended that there was no additional wear and tear so far as the fencing was concerned and, therefore, ESA could not be allowed. 11. We have considered the rival contentions and we are of the view that in the light of the Board's circular, ESA has to be allowed on concern basis and not on the number of days each plant worked double shift or triple shift. Therefore, in the light of Board's circular, ESA has to be allowed as allowable on the poultry shed as well as on fencing, water-tank and well, in the assessment years 1983-84, 1984-85 and 1985-86. 12. In the assessment year 1983-84, ground No. 2 relates to the question of subsidy. The Assessing Officer reduced the cost of assets by subsidy amounting to Rs. 4,20,085 while w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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