Case: Commissioner Of Income-Tax(Central) Vs. M/S. Gwalior Rayon Silk Mfg.(Wvg.)Co.Ltd

of carrying raw materials, finished products and workers. Therefore, they must be regarded as building or buildings within the meaning of sub-clause (vi) of Section 10(2) of the 1922 Act. It was also held that dictionary meaning of the word building cannot be confined to its to a structure or superstructure having walls and a roof over it. The roads and roadways are adjuncts of the buildings lying within the factory area linking them together and are being used for carrying on its business by the assessee. Therefore, they must be regarded as forming part of the factory building. The expenditure incurred, therefore, will have to be regarded as expenditure on buildings and depreciation must be allowed. In the appeal filed against the judgment in Colour Chem Ltd. case (CIT v. Colour Chem Ltd., 1977 (106) ITR 323 (Bom) the leave was refused on the ground of delay. More or less, though for different reasons, on "common sense principle" the same is the ratio in CIT v. Lucas-T.V.S. Ltd. ( 1977 (110) ITR 346 (Mad) When the appeal was filed, this Court dismissed the special leave petition on the ground of delay. Same is the view in Panyam Cements and Mineral Industries Ltd. v. Addl. CIT ( 1979 (117) ITR 770 : 1977 CTR(AP) 225), CIT v. Kalyani Spinning Mills Ltd. ( 1981 (128) ITR 279 : 1981 TaxLR 358 : (1981) 85 CWN 308); CIT v. McGaw Ravindra Laboratories (India) Ltd. ( 1981 (132) ITR 401 (Guj) In CIT v. Bangalore Turf Club Ltd. ( 1984 (150) ITR 23 : 1984 TaxLR 74 (Kant) when the appeal was filed this Court dismissed the same in Special Leave Petitions Nos. 5198-99 of 1985 dated December 16, 1987 12. In Words and Phrases, (Permanent) Vol. 5A, building, was defined that everything is necessary to perfect a manufacturing establishment and fit for use designed as a part of it is a building. The roads would serve as necessary links between the raw material and finished products in the business activity. The roads are liable to wear and tear and need constant repairs or relaying the road afresh. 13. While enacting the Income Tax (Fourth Amendment) Rules, 1983, the rule-making authority accepted this interpretation consistently laid down by various High Courts that building includes roads and also elongated bridges, culverts, wells and tubewells as building but prescribed fixed rates of depreciation setting at rest the variable rates claimed by the assessee. Rules validly made have the same force as the sections in the Act. The contention of the respondents that unless the Act itself is amended, the rules would not cut down the meaning of the word building is without substance. The inclusive definition of building to include roads, etc. enlarges the scope of Section 32 and does not whittle down its effect. It is true that in CIT v. Coromandel Fertilisers Ltd. ( 1985 (156) ITR 283 : 1984 TaxLR 340 (AP)) the High Court of Andhra Pradesh interpreted that roads fell within the meaning of plant and granted depreciation at the rates admissible to the plant. CIT v. Sandvik Asia Ltd. ( 1983 (144) ITR 585 : 1983 TaxLR 758 (Bom)) took the opposite view and held them to be building. In view of the consistent view of the other High Courts and which, in our view, is the correct one, the view of the High Court of Andhra Pradesh is not correct in law. 14. It is true, as contended for the Revenue, that the Income Tax (Fourth Amendment) Rules, 1983, were given effect from April 2, 1983 thereby manifesting that the rates enumerated in the Rules would be applicable prospectively from the later assessment years. It could by no means be construed that the Legislature expressed its intention that for the earlier period building does not include roads. If it were to be so, it was open to Parliament to have expressly bring out an amendment to the Act to that effect. On the other hand we are of the view that the subordinate legislature accepted the interpretation given by the High Courts and included roads as an integral part of the building. In Bangalore Turf Club Ltd. case ( 1984 (150) ITR 23 : 1984 TaxLR 74 (Kant) the Karnataka High Court held that the amendment was by way of a clarification in conformity with the law laid down by High Courts. It is also equally settled law that an interpretation consistently given over years and accepted and acted upon by the department may not normally be upset even though a different view of law may reasonably be possible unless the new perceptions and circumstances warrant a fresh look. The ratio in Saharanpur Electric Supply Co. Ltd. v. CIT ((1992) 2 SSC 736 : 1992 (194) ITR 294 ) is not in conflict with the above view. It is also settled law that, unless it is expressly stated or by necessary implication arises, a statute should always be read as prospective. The ratio therein is also in consonance with the view we are taking. 15. Accordingly, we have no hesitation to hold that the roads laid within the factory premises as links or providing approach to the buildings are necessary adjuncts to the factory buildings to carry on the business activity of the Assessee and would be building within the meaning of Section 32 of the Act. The capital expenditure incurred thereon is admissible to depreciation on written down value. It has to be worked out for the purpose of depreciation as per the provisions of the Act read with the Rules in the Appendix. Equally, the drains also would be an integral part of the building for the convenient enjoyment of the factory. The expenditure incurred in laying the drains or written down value of the cost of its construction would equally be entitled to depreciation. It is to be worked out in terms of Section 32 of the Act read with the Rules in the Appendix.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]14. It is true, as contended for the Revenue, that the Income Tax (Fourth Amendment) Rules, 1983, were given effect from April 2, 1983 thereby manifesting that the rates enumerated in the Rules would be applicable prospectively from the later assessment years. It could by no means be construed that the Legislature expressed its intention that for the earlier period building does not include roads. If it were to be so, it was open to Parliament to have expressly bring out an amendment to the Act to that effect. On the other hand we are of the view that the subordinate legislature accepted the interpretation given by the High Courts and included roads as an integral part of the building. In Bangalore Turf Club Ltd. case ( 1984 (150) ITR 23 : 1984 TaxLR 74 (Kant) the Karnataka High Court held that the amendment was by way of a clarification in conformity with the law laid down by High Courts. It is also equally settled law that an interpretation consistently given over years and accepted and acted upon by the department may not normally be upset even though a different view of law may reasonably be possible unless the new perceptions and circumstances warrant a fresh look. The ratio in Saharanpur Electric Supply Co. Ltd. v. CIT ((1992) 2 SSC 736 : 1992 (194) ITR 294 ) is not in conflict with the above view. It is also settled law that, unless it is expressly stated or by necessary implication arises, a statute should always be read as prospective. The ratio therein is also in consonance with the view we areAccordingly, we have no hesitation to hold that the roads laid within the factory premises as links or providing approach to the buildings are necessary adjuncts to the factory buildings to carry on the business activity of the Assessee and would be building within the meaning of Section 32 of the Act. The capital expenditure incurred thereon is admissible to depreciation on written down value. It has to be worked out for the purpose of depreciation as per the provisions of the Act read with the Rules in the Appendix. Equally, the drains also would be an integral part of the building for the convenient enjoyment of the factory. The expenditure incurred in laying the drains or written down value of the cost of its construction would equally be entitled to depreciation. It is to be worked out in terms of Section 32 of the Act read with the Rules in the Appendix.