Law:

Section:

I Section 43(3) of the Income-tax Act, 1961 - Plant - Assessment years 1964-65 and 1965-66 - Whether portion of walls of freezing chamber containing insulation materials constitute 'plant' within meaning of section 43(3) - Held, yes Section 32 read with section 43(3) of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment years 1964-65 and 1965-66 - Whether portion of walls of freezing chamber containing insulation materials constitute 'plant' within meaning of section 43(3) and as such entitled to depreciation at rate of 15 per cent - Held, yes Words and phrases : Plant as occurring in section 43(3) FACTS I In the assessment of the firm for the two years the ITO allowed depreciation on the building of the cold storage on its written down value, at 5 per cent. In appeal, the AAC held that in the relevant years, the ITO should have allowed depreciation on factory building at 10 per cent instead of 5 per cent. The Tribunal, held that in the circumstances the assessee was, in respect of each of the two years, entitled to depreciation, calculated at 15 per cent on the written down value of the factory building as it formed part of the plant used for running the cold storage. On reference : HELD I In common parlance the word "plant" includes within its ambit buildings and equipments used for manufacturing purposes. On the observation made by the members of the Tribunal it was obvious that the building in question would be a part of the air-conditioning plant of the cold storage, in the sense in which the word is understood in common parlance. The definition of plant in section 43(3) indicates the legislature intended to give to the word "plant" an extended meaning which went even beyond that conveyed by it in common parlance. It surely did not intend to exclude from its ambit things which would normally be included in it. Viewed in that light, the building in question would be a part of the plant used for air-conditioning the assessee's cold storage and the assessee would be entitled to claim depreciation with regard to it at 15 per cent on its written down value. II Section 31 of the Income-tax Act, 1961 - Repairs and insurance of machinery,…

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