A structure that is specially designed to make a plant operative and that could not have functioned in the absence of the structure is 'plant' within the meaning of section 43(3) of the Income-tax Act, 1961.

1. - The Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated August 24, 1983, under section 256(1) of the Income-tax Act in respect of the assessment years 1976-77 and 1977-78 :

" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in holding that the massive reinforced concrete structure, especially designed to take up loads, constituted 'plant' within the meaning of section 43(3) of the Income-tax Act, 1961." ?

2. The assessee is a limited company and is a manufacturer of grinding media balls and ingots. A claim for depreciation initially was made on the plant and machinery installed. The Income-tax Officer held that the building for the plant and machinery is not plant and, therefore, the depreciation and investment allowance was disallowed. In appeal before the Commissioner of Income-tax (Appeals), it was observed that the building in the present case could be covered within the meaning of the word "plant". The main stress before the Commissioner of Income-tax (Appeals) was that the factory structures which have been constructed for production of heavy steel ingots, grinding media, manganese steel, etc., have basically heavy steel structures with deep wide RCC foundation forming integral parts of the plant. The structures are extraordinarily heavy and specially designed to take up heavy dynamic live and static loads of cranes which handle hefty ladles with hot molten liquid metal, high density scrap for charging scrap furnaces and handling hot and cold silica, without which furnace mixers, molding machine, etc., cannot function. A certificate to this effect was submitted by a chartered engineer. When this matter was taken up before the Income-tax Appellate Tribunal by the Revenue it was observed that the structures which have been raised make the plant operative and the order of the Commissioner of Income-tax (Appeals) was confirmed.

3. The Delhi High Court in R.C. Chemical Industries v. CIT (1982) 134 ITR 330 Delhi. has laid down the following principles (at page 336) :

" (1) The definition of 'plant' in section 43(3) should be given a wide meaning as it is an inclusive definition ;

(2) All buildings are not 'plant' despite the dictionary meaning which includes buildings ; but a building or structure is not per se to be excluded from the ambit of the expression 'plant' ;

(3) If the concrete construction or building is used as the premises or setting in which the business is carried on in contradistinction to the fulfilling of the function of plant, the building or construction or part thereof is not considered plant. The true test is whether it is the means of 'carrying on the business' or the location for so doing ;

(4) In order for a building or concrete structure to qualify for inclusion in the term 'plant', it must be established that it is impossible for the equipment to function without the particular type of structure ; and

(5) The particular apparatus or item must be used for carrying on the assessee's business and must not be his stock-in-trade. The matter has to be considered in the context of the particular business of the assessee, e.g., books are a lawyer's plant but a bookseller's stock-in-trade."

4. Under section 43(3), "plant" has been defined as under :

" ' Plant ' includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession."

5. From the above definition of "plant" it would be seen that it is not exhaustive and is illustrative and has a wide meaning. It could be the apparatus of a businessman by which he is carrying on the business which may be termed as plant. The apparatus need not be used by mechanical operation or by any other process. For the purpose of a building, it has to be seen whether it can be said to be an apparatus in which the business is being carried on. There may be heavy structures on which the machinery is installed with whi