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2003 DIGILAW 1228 (RAJ)

Commissioner of Income v. R. G. Ispat Ltd.

2003-09-01

K.S.RATHORE, S.K.KESHOTE

body2003
JUDGMENT 1. - Heard learned counsel for the parties. 2. The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, "the Tribunal") made reference of the following question for our consideration. : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the view taken by the Commissioner of Income-tax (Appeals) that the assessee's building of massive rein forced concrete structure is an integral part of the plant and machinery and consequently in directing the Income-tax Officer to allow investment allowance and depreciation thereon ?" 3. The relevant assessment year is 1982-83. The assessee claimed before the Assessing Officer that the building wherein the plant and machinery is housed should be treated as a plant and, depreciation and investment allowance should be allowed thereon. This claim made by the assessee was disallowed by the Assessing Officer. The assessee had taken the matter in the appeal before the Commissioner of Income-tax (Appeals), who set aside the order of the Assessing Officer and remitted the matter to him to decide it on the basis of the principles laid down in the order of the Tribunal in the case of the assessee for the assessment years 1976-77 and 1977- 78. In the fresh order again the Income-tax Officer disallowed this claim of the assessee. The Commissioner of Income-tax (Appeals) allowed the appeal holding that the building of the assessee is a plant and he is entitled for depreciation and investment allowance. The learned Tribunal followed its earlier order and confirmed the view taken by the Commissioner of Income-tax (Appeals). 4. Relying on the judgment of the Hon'ble apex court in the case of CIT v. Anand Theatres (2000) 244 ITR 192 , Shri Mathur, learned counsel for the Revenue, contended that the view taken by the learned Tribunal is wholly erroneous. 5. Shri Kasliwal, learned counsel for the assessee, on the other hand, placed reliance on the decision of the hon'ble apex court in CIT v. Karnataka Power Corporation (2001) 247 ITR 268 . 5. Shri Kasliwal, learned counsel for the assessee, on the other hand, placed reliance on the decision of the hon'ble apex court in CIT v. Karnataka Power Corporation (2001) 247 ITR 268 . In Karnataka Power Corporation's case (2001) 247 ITR 268 their Lordships of the Hon'ble Supreme Court held that if the finding of the Tribunal is to the effect that generating station building had been constructed to be an integral part of its power generation system building, it constituted "plant" and distinguished the decision in the case of CIT v. Anand Theatres (2000) 244 ITR 192 (SC). 6. Where a particular structure is merely helpful for carrying on the activities of the assessee may not be a plant but if it is an integral part of the plant and machinery or a portion of that building is an integral part of the plant and machinery that should be considered in the light of the decision of the Hon'ble apex court in CIT v. Karnataka Power Corporation (2001) 247 ITR 268. 7. The issue involved in this case needs to be considered by the Tribunal in the light of the decision of the Hon'ble apex court in CIT v. Karnataka Power Corporation (2001) 247 ITR 268 . 8. We restore the matter back to the Tribunal with the direction, to give this required finding for the purpose of investment allowance and depreciation in the case of this assessee especially examine whether the entire building or part of building is eligible for investment allowance and depreciation in the light of the decision of the Hon'ble Supreme Court in CIT v. Karnataka Power Corporation (2001) 247 ITR 268. 9. It is expected from the Tribunal to consider and take fresh decision in the matter within three months from the date of the communication of this order. 10. The reference so made stands disposed of accordingly. *******