Decided on December 11,1992



T.A. Bukte, Judicial Member - (1.) ALL these appeals are filed by the different assessees against the different orders of the Commissioner of Income-tax (Appeals), Pune. One major common ground is involved in all these appeals. That common ground is not accepting the building as plant to allow investment allowance on the said building in which the actual working of the machinery and pipelines are installed. The appellants case in all these appeals is that the Assessing Officer as well as the CIT (Appeals) erred in not accepting the explanation regarding the building in which the machines and pipelines are installed to carry on the business of manufacturing of the appellants as plant and to allow deduction on account of depreciation and investment allowance. However, some more different grounds are involved in some of these appeals and they will be dealt with when each appeal is dealt with separately.
(2.) We have heard the learned representative for the appellants, Shri C.V. Khandelwal at great length. He has stressed upon the point to treat and accept the building as plant in which the machines and pipelines are installed for smooth carrying out the business of grinding wheat, chana dal etc. Shri Khandelwal's main argument is that without the help of the building no such work as undertaken by the appellants to manufacture aata, maida and besan by grinding them on the machines fitted with the pipelines cannot be carried out. Therefore he has urged that the same may be treated as plant for allowing depreciation and investment allowance on them. In the ordinary course the depreciation is allowable on the buildings but the investment allowance is not allowable unless the buildings are accepted as plants. The learned departmental representative, Shri Gautam Kar also advanced considerable arguments at great length. His contentions are that there is no doubt that the machines and pipelines installed in the building are of the nature of the plant but according to him the building in which such machines and pipelines are installed neither can be treated as plant nor such contention is acceptable. Therefore he has strongly opposed to treat the building in which the machines and pipelines are installed for the purpose of allowing investment allowance. In this view of the argument it has become necessary to examine the facts relating to the building in which the machines and pipelines are installed.
(3.) THE CIT (Appeals)'s predecessor by his order dated 26-7-1988 had accepted the assessee's contention in part and held that 10 per cent of the factory building was required to be considered as an integral part of cost of investment on actual plant and machinery on the basis of submissions made by the appellants by letter dated 3-7-1986. However, the present CIT (Appeals) refused to accept even 10 per cent of the factory building as integral part of the cost of investment of plant and machinery. THE appellants' company's business is of grinding grams, pulses and wheat in the flour mills and selling aata, maida, sooji, rava and besan in the market. For the purpose of manufacturing aata, maida, rava, sooji from wheat and besan from chana the appellants have erected plant and machinery at different places such as Hadapsar, Urili Kanchan and Wasi near New Bombay. It was submitted that the erection of the buildings are made in such a way that various machines used for the purposes of processing and manufacturing are fixed in the structure of the buildings. THE structure, prima facie, appears as building but actually and factually functioning as part of the entire plant requires for grinding of the gram, pulses and wheat For these reasons the appellants claimed to allow additional depreciation, extra shift allowance and investment allowance on the cost of such building on the ground that the building forms an integral part of the plant and machinery.;

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