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Section 43(3) of the Income-tax Act, 1961 - Plant Nursing Home is 'Plant' [A.Y 1998-99 and 1999-2000] Where the assessee, who was a medical practitioner, was running a nursing home applying the ratio laid down by the apex court in CIT v. Dr. B. Venkata Rao [2000] 243 ITR 81, it was to be held that the cost of construction of the nursing home of the assessee was entitled for depreciation on the ground that it was a plant. JUDGMENT P.D. Dinakaran, J.-The above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal in I.T.A. Nos. 433 and 434/Mds/2003, dated November 25, 2005. 2. The Revenue is the appellant. The assessment years involved are 1998-99 and 1999-2000. The assessee, who is a medical practitioner, constructed a nursing home during the period February, 1996, to October, 1998. On a survey conducted by the Income-tax Department on November 3, 1998, it was found that the cost of construction as shown by the assessee at Rs. 19,40,500 has been underestimated and the Assessing Officer, based on the report of the Departmental Valuation Officer, estimated the cost of construction at Rs. 37,31,906 and accordingly, called upon the assessee to explain as to why the difference amount of Rs. 17.92 lakhs should not be treated as unexplained investment. After a detailed enquiry, the Assessing Officer completed the assessment and brought to tax a sum of Rs. 18 lakhs by treating it as unexplained investment. 3. Against the said order of assessment, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who, by order dated December 11, 2002, reduced the cost of construction by Rs. 5 lakhs. On further appeal by the assessee, the Income-tax Appellate Tribunal, placing reliance on the decision of the apex court in CIT v. Dr. B. Venkata Rao [2000] 243 ITR 81, held that the cost of construction of the nursing home is entitled for depreciation on the ground that it is a plant. 4. Aggrieved by the said decision of the Tribunal, the Revenue has preferred the present appeal raising the following substantial question of law : "In the absence of any application of functional test being applied to a building, to…

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