JUDGMENT [ENTITY], J.
1. The following question has been, at the instance of the Revenue, referred to us by the Income-tax Appellate Tribunal, Cochin Bench :
"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law arid fact in treating roads as buildings or part of the buildings and allowing depreciation for the same ?"
The assessee contended before the Income-tax Officer that it was entitled to claim depreciation in terms of [SECTION] of the [ACT], in respect of the roads owned and used by it for the purposes of its business. This contention was rejected by the Income-tax Officer stating that the roads were not buildings, but at best an improvement on land. This finding was reversed by the Appellate Assistant Commissioner, He held that roads were not part of the land in the strict sense of the term and were, therefore, a depreciable asset. Affirming this finding, the Tribunal held that the roads in question were buildings. In doing so, the Tribunal followed the decision of the Bombay High Court in [PRECEDENT] [PRECEDENT].
2. [SECTION] of the [ACT], in so far as it is material, reads :
"32. Depreciation. (1) In respect of depreciation of buildings
owned by the assessee and used for the purposes of the business
the following deductions shall, be allowed."
It is not disputed that these roads are owned by the assessee and constructed within the factory premises and used for its business purposes. The question is whether these roads are buildings within the meaning of [SECTION] so as to entitle the assessee to claim depreciation in respect of them.
3. The views expressed in various decisions of the High Courts on this question do not seem to be uniform. In certain decisions, the High Courts of Bombay, Calcutta, Andhra Pradesh and Madras have taken the view that all roads owned by an assessee and used for the purposes of the business are buildings in respect of which [SECTION] allows depreciation at the rates specified under [SECTION] of the [ACT], On the other hand, in [PRECEDENT], the Calcutta High Court takes the view that merely because a road is used for the purposes of the business, it cannot be regarded as a building, unless it has been constructed in such a way as to be capable of being regarded as a building. In so saying, the Calcutta High Court followed the reasoning of the Supreme Court in [PRECEDENT]. On the other hand, the Bombay High Court in [PRECEDENT] referred to this decision of the Supreme Court and came to a different conclusion from that which was reached by the Calcutta High Court in [PRECEDENT]. The Bombay High Court stated that where it was shown that a road was owned and used by an assessee for the purposes of his business, such road qualified for being regarded as a "building" for the purpose of depreciation. Decisions in [PRECEDENT]; [PRECEDENT]; [PRECEDENT] and [PRECEDENT] [PRECEDENT], adopted more or less the same line of reasoning as in [PRECEDENT]. The Calcutta High Court in [PRECEDENT] regarded driveways and compound walls in petrol pumps as buildings.
4. In [PRECEDENT], the Supreme Court stated that the word "building" in [SECTION] of the [ACT] ([SECTION] of the present Act), means a structure and does not include the site. The reason is that there cannot be any destruction of the site unlike in the case of a building. In [PRECEDENT], the question whether a structure could be regarded as a building for the purposes of [ACT] came up for consideration. The Supreme Court stated that in the absence of a statutory definition, the word had to be construed in its grammatical sense, unless there was something in the context or object of the statute to show that it was used in a special sense different from its ordinary grammatical meaning. The court referred to the following definition of "building" in Webster's New International Dictionary (p. 2000):
"That which is built specify, (a) as now generally used a fabric or edifice, framed or constructed, designed to stand more or less permanently and covering a space of land for use as a dwelling, store house, factory, shelter for beasts or some other useful purpose. Building in this sense does not include a mere wall, fence, monument, hoarding or similar structure though designed for permanent use where it stands nor a steam boat, ship or other vessel of navigation."
Referring to that definition, the court stated that the existence or absence of a roof was not necessarily relevant to the question whether a structure was a building. The court observed (p. 2000);
" A large stadium or an open-air swimming pool constructed at a considerable expense would be a building as it is a permanent structure and designed for a useful purpose. "
The court then cited with approval the following observation of [ENTITY].]', in [PRECEDENT] (see [PRECEDENT]):
"The masonry on the sides of a canal is not sufficient to constitute it a 'building'. A London street, though paved and faced with stonework, would yet be 'land', whilst the Holborn Viaduct would be a ' building'."
A viaduct is a long bridge of series of arches conducting a railroad or road over a valley or other area of low level (New Webster's Dictionary of the English Language). Going by the definition of [ENTITY] J., a mere road is only part of the land even if it is paved and faced with stonework. But a specially constructed road such as a viaduct would be a building.
5. In the absence of a statutory definition, or any indication in the statute as to any special meaning, the expression "road" has to be understood in its grammatical sense. Ordinarily roads are not understood as buildings. There may, however, be exceptional roads such as a viaduct or a like structure of a permanent character involving such a degree of construction and expense as to be approximated to a building. Such roads, when owned and used by the assessee for the purposes of business, attract depreciation at the rates specified in [SECTION] to the [ACT].
6. The character of the road in the context of a claim for depreciation has to be determined in each case on the basis of relevant facts and with reference to the principle stated above. These facts, in the present case, have not been determined by the authorities. Nor has the principle of law been correctly appreciated by the Tribunal. We are accordingly of the view that the finding of the Tribunal that the roads are buildings cannot be supported. The answer to the question referred to us would depend upon the determination of the relevant facts.
7. The Tribunal shall accordingly hear the parties after affording them an opportunity to adduce further evidence and come to a finding on the basic facts to draw an inference therefrom with reference to the correct principle of law. In the circumstances, we do not answer the question referred to us.
8. We direct the parties to bear their respective costs in these tax referred cases.
9. A copy of this judgment under the seal of the High Court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.