Law:

Section:

Section 43(3), read with section 32, of the Income-tax Act, 1961 - Plant - Whether while entire building may not constitute plant, some parts of it may be treated as plant, depending upon its use and it is a matter to be claimed and proved by assessee before Assessing Officer - Held, yes - Whether depreciation at rate applicable to plant has to be allowed to so much of area qualifying as plant - Held, yes FACTS The assessee's claim for depreciation, at the rate applicable to 'plant' _rejected by the Commissioner (Appeals) in its revisional jurisdiction. On appeal, the Tribunal, following some decision of the Supreme Court and also of the High Court allowed the assessee's claim, reversing the decision of the Commissioner (Appeals), holding that the assessee was entitled to depreciation on the hospital building at rate applicable to 'plant'. On appeal : HELD In a nursing home or hospital, the operation theatre has to be kept sterilised all through to prevent germs entry and, therefore, the theatre room may be called a plant, and, hence, it has to be treated differently from other parts of the hospital building, which building has consultation rooms, accommodation for patients, canteen, resting place, etc. This may be the position with regard to the X-ray plant, which is also to be insulated to prevent any kind of pollution and to prevent X-rays escaping outside. Therefore, while the entire building may not constitute plant, some parts of it may be treated as plant, depending upon its use. It is, therefore, a matter to be claimed and proved by the assessee before the Assessing Officer. This issue was not considered by the Tribunal or any other authority in these lines. A blanket order of the Tribunal following some decisions without going into the details was not tenable. Therefore, the order of the Tribunal was to be set aside, remanding the matter to the Assessing Officer for deciding the matter afresh calling for details from the assessee, in the light of the abovesaid observations and granting the depreciation at the rate applicable to plant only to so much of the area qualifying as 'plant'. CASES REFERRED TO CIT v. Hotel Luciya [1998] 231 ITR 492/ 100 Taxman…

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