Law: Income Tax Act, 1961

Section: 32

Income-tax----Depreciation---Plant---Building---Finding that building was specifically designed and equipped to function as a nursing home---Building constituted plant---Entitled to depreciation at rate of ten percent---Indian Income Tax Act, 1961, S.32. 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". His contention was rejected by the Income-tax Officer and by she Commissioner (Appeals). The Income-tax Appellate Tribunal found to the contrary. Applying the functional test, it held that the nursing home was a plant. The High Court affirmed that view. On appeal to the Supreme Court: Held, dismissing the appeal, that it was clear from the order of the Tribunal as also the assessment order that the assessee's nursing home was equipped to enable the sterilisation of surgical instruments and bandages to be carried on. It was reasonable to assume in the circumstances, particularly having regard to the Tribunal's order which stated that the sterilisation room covered about 250 sq. ft. that the nursing home was also equipped with an operation theatre. In the circumstances, the assessee was entitled to depreciation at 10 percent on the nursing home building on the ground that it was a "plant". CIT v. Venkata Rao (Dr.) (B.) (1993) 202 ITR 303 affirmed. Tulsi (S.K.) & Sons v. CIT (1991) 187 ITR 685 (All.) approved. THIS ORDER PASSED BY : The Revenue is in appeal by special leave against the judgment and order of a Division Bench of the High Court of Karnataka (see (1993) 202 ITR 303). The High Court answered in the affirmative and in favour of the assessee the following question (page 304): "Whether, on the facts and in the circumstances of the case, the assessee is entitled to depreciation at 10 percent on the nursing home building on the ground that it is a 'plant'?" The assessee is a medical practitioner. He runs a nursing home. In respect of the building in which the nursing home is run, the assessee claimed, for the assessment year 1983-84, that it was a "plant". His contention was rejected by the Income-tax Officer…

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