Truck terminus cannot be treated as building for providing resting /toilet facility

In the present case, we are concerned with the issue of depreciation for income generated from the truck terminus which is spread across 27 bighas of land. The trucks are parked in the truck terminus for which parking fee is collected by the assessee and in order to encourage the truck drivers to park their vehicles in the truck terminus, resting and toilet facility are provided in the appurtenant building in the truck terminus. The definition of the term plant is of wide magnitude and when it is clear enough that the buildings are not let out by the assessee to earn rent, the parking fee income generated by the truck terminus cannot be attributed to the building which houses the resting quarters and the toilet facility, for the truck drivers.

Under Section 43 of the IT Act, for the purpose of allowable depreciation of income under Section 32, unless the context otherwise requires, the definition given in sub-section (3) of Section 43 has to be taken into account. Under Section 43(3), plant includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purpose of the business or profession and this itself makes it clear that the facility or the tools used for generating income, can be a plant and need not connote only factories or require use of machineries. Of course buildings are excluded from the definition of plant, under Section 43(3) of the IT Act.

Gotanagar Truck Terminus is a plant and not building, for the purpose of claiming depreciation under Section 32 read with Section 43 of the IT Act. Consequently the assessee is held entitled to depreciation at the rate of 25% as prescribed for plant and not at 10%, as applicable for building.

Full Text of the High Court Judgment / Order is as follows:-

Hrishikesh Roy, J. – Heard Mr UK Borthakur, the learned counsel for the appellant/assessee. Also heard Mr S Sarma, the learned Standing Counsel, Income Tax Department on behalf of the respondent.

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