Income Tax v. Live Well Home Finance (P) Ltgd

*THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND *THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM+I.T.T.A.No.239 of 2003 % Dated 27.11.2014 The Commissioner of Income Tax. ….Appellant $ Live Well Home Finance (P) Ltd. ….Respondent ! Counsel for the appellant : Sri S.R.Ashok^ Counsel for respondent : Sri A.V.Shiva Karthikeya < GIST: > HEAD NOTE: ? CASES REFERRED:1. (2011) 332 ITR 0235(AP)2. (1989) 175 ITR 0154 (AP)3. (1998) 229 ITR 0776 (All)4. (2002) 256 ITR 03205. (1971) 082 ITR 0044(SC)6. 2004(4) ALT 781 THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAMI.T.T.A.No.239 of 2003 JUDGMENT: (Per LNR,J) The respondent herein undertakes several businessactivities. One of it is to acquire the shuttering material, which isused in the process of construction of buildings and to lease thesame to the intending users. In its returns of income submitted for the assessment year 1995-96, it claimed depreciation ofRS.28,85,450/- being the cost of the shuttering material. Its pleawas that the cost of each item of the shuttering material is lessthan Rs.5,000/- and accordingly, it is entitled for the depreciationof 100% under Section 32(1)(ii) of the Income Tax Act, 1961 (forshort ‘the Act’). The Assessing Officer did not accept the claim,but allowed depreciation only to the extent of 25%. Aggrieved bythat, the respondent filed an appeal before the Commissioner ofIncome Tax (Appeals). Through his order, dated 22.03.1997, theCommissioner allowed the appeal. Assailing that order, theappellant herein i.e., Department filed I.T.A.No.224/Hyd/98before the Hyderabad Bench of the Income Tax AppellateTribunal. The appeal was dismissed by the Tribunal, through itsorder, dated 11.06.2002. Hence, this further appeal underSection 260-A of the Act. Sri S.R.Ashok, learned senior Standing counsel for theappellant submits that the matter is no longer res integra andrecently a Division Bench of this Court, in Commissioner of Income Tax vs. Raghavendra Constructions[[1]]held thatcomponents of shuttering material cannot be treated asindependent items and the cost of the entire material acquired byan assessee must be treated as a unit. He contends thatwhatever may have been the justification for the Tribunal intaking the view as it did through the order under appeal, thesame is not tenable in view of the judgment of this Court. Onmerits also, he submits that it is difficult to treat each componentof shuttering material as a unit and 100% depreciation cannot beallowed for them. None appeared for the respondent. We requested SriA.V.Shiva Karthikeya, learned counsel to assist this Court. Hesubmits that the various High Courts all over the Country as wellas this Court have taken the view that in the context of extendingthe benefit under Section 32(1)(ii) of the Act, each unit needs tobe taken into account to verify whether the cost of the same isless than Rs.5000/- and the judgment of this Court inRaghavendra Constructions’ case (1 supra) runs contrary to None appeared for the respondent. We requested SriA.V.Shiva Karthikeya, learned counsel to assist this Court. Hesubmits that the various High Courts all over the Country as wellas this Court have taken the view that in the context of extendingthe benefit under Section 32(1)(ii) of the Act, each unit needs tobe taken into account to verify whether the cost of the same isless than Rs.5000/- and the judgment of this Court inRaghavendra Constructions’ case (1 supra) runs contrary to the predominant judicial opinion. He submits that inCommissioner of Income Tax vs. Sri Krishna Bottlers Pvt.Ltd.[[2]], a Division Bench of this Court dealt with the concept of100% depreciation on individual units in detail and took the viewthat even the bottles in which the soft drink is supplied and theshells, in which they are placed qualify for 100% depreciation,and though the said judgment was taken note of by this Court inRaghavendra Constructions’s case (1 supra), a crucialparagraph in the judgment of Sri Krishna Bottlers Pvt. Ltd.’scase (2 supra) was treated as though it was not in existence atall. He submits that in a way, the judgment in RaghavendraConstructions’ case (1 supra) deserves to be treated asrendered in sub silentio of an otherwise binding precedent. Learned counsel has drawn our attention to the judgments of theother High Courts on the same subject relating to the samematerial, as well as the comment made in relation to thejudgment of this Court in Raghavendra Constructions’s case (1supra) in the treatise ‘Income Tax by Kanga & Palkhivala’. The only question that arose for consideration in theappeals before the Commissioner as well as the Tribunal was asto whether the shuttering material purchased by the respondent,in the assessment year 1995-96 qualified for 100% depreciation. Section 32 of the Act is relevant in this context. The provision asit stood then, reads: 32. Depreciation- (1) In respect of depreciation of buildings,machinery, plant or furniture owned by the assessee and usedfor the purposes of the business or profession, the followingdeductions shall, subject to the provisions of section 34, beallowed- (i) ***** (ii) in the case of any block of assets, such percentageon the written down value thereof as may beon the written down value thereof as may be prescribed: Provided that where the actual cost of any machinery orplant does not exceed five thousand rupees, the actual costthereof shall be allowed as a deduction in respect of theprevious year in which such machinery or plant is first put touse by the assessee for the purposes of his business orprofession From this, it is evident that in case, the cost of an itemwhich answers the description of ‘plant’, is less than Rs.5,000/-depreciation is permitted to the extent of 100%. That theshuttering material answers the description of ‘plant’ is beyondany pale of doubt. Almost all the High Courts and this Court inRaghavendra Constructions’ case (1 supra) have taken suchview. The question as it appears before us is as to, whatconstitutes a unit thereof. prescribed: Provided that where the actual cost of any machinery orplant does not exceed five thousand rupees, the actual costthereof shall be allowed as a deduction in respect of theprevious year in which such machinery or plant is first put touse by the assessee for the purposes of his business orprofession From this, it is evident that in case, the cost of an itemwhich answers the description of ‘plant’, is less than Rs.5,000/-depreciation is permitted to the extent of 100%. That theshuttering material answers the description of ‘plant’ is beyondany pale of doubt. Almost all the High Courts and this Court inRaghavendra Constructions’ case (1 supra) have taken suchview. The question as it appears before us is as to, whatconstitutes a unit thereof. It is a matter of common knowledge that shuttering andcentering material comprises of steel plates or wooden planks ofstipulated sizes and wooden or steel planks to provide horizontalsupport and steel pipes or wooden polls to provide verticalsupport. Once manufactured, the material is capable of beingreused on quite large number of occasions and works. One doesnot find any instance of a person proposing to construct a houseor building, acquiring the material exclusively for that purpose orthe material not being used for other similar works. Small andindependent units are either purchased, or taken on lease andput to use for providing support to erect colomns and to lay theRCC slab. The lack of uniformity in this behalf is so glaring that inthe same building, the sizes of rooms are different and thebeams or pillars are not uniform. Material of the required sizeand dimension needs to be chosen. Another aspect is that if aparticular builder constructs a multi-storied building, the entireconstruction does not take place at once, even if the shutteringmaterial, which is required for the entire proposed constructedarea, is available. The construction has to progress graduallyand without exception, the material that is used in one floor istaken to the other floor for providing support. All this discussion isundertaken only to drive home the point that the shutteringmaterial of any particular area cannot be treated as a unit. It isnot only supplied, but also is used, in small units. In the context of availing the benefit under Section 32(1)(ii)of the Act, identification of a unit of ‘plant’ becomes essential. Though the Act and the precedents on the subject are silentabout this, the safest way is to identify the ‘irreducible minimum’of the plant or machinery, which in turn can be put to independent use. The mere fact that the number of such unitscan be clubbed together to achieve the result in a greatermagnitude by itself does not result in merger into the larger oneor loss of their identity. In this behalf, individual plates of sizes ofabout 3ft. x 3ft. for providing support for slab or 10ft x 3ft. or 2ft.for providing support to the beams or pillars can safely be treatedas units. If the slab of 1000 ft. is to be laid, the builder or themeson must put to use, the required number of steel plates orwooden planks of the typical size to use. Nowhere we comeacross the instances of the shuttering material, of the size of theroom or the building either being ordered or manufactured muchless being put to use. These and other aspects were taken intoaccount by various High Courts and it was held that each of thebits must be taken as a unit. In Harijan Evam Nirbal Varg Avas Nigam Ltd. vs. Commissioner of Income Tax[[3]], the Allahabad High Courtexplained the concept as under: In Harijan Evam Nirbal Varg Avas Nigam Ltd. vs. Commissioner of Income Tax[[3]], the Allahabad High Courtexplained the concept as under: “Shuttering is normally used to support the roof whenconcrete is being laid on it. These are not items ofconsumable stores, for they are retrieved after the roof hasbeen laid, and used again elsewhere. It is like any other toolwith the help of which construction is done, say, Karni, Tasla,Kudel, or Spade. It is not, therefore, correct to hold thatshuttering material is not plant or machinery. In our opinion, itis plant and machinery just as a concrete mixer or any othertool, with which the Karigars and masons work would be. The assessee is, therefore, entitled to depreciation onshuttering material and the same be allowed to it.” The Punjab and Haryana High Court in Commissioner of Income Tax vs. Akal Construction and Engineering Co[[4]]observed as under: “Whether, on the facts and in the circumstances of thecase, the Income Tax Appellate Tribunal was right in law inallowing depreciation on wooden shuttering at the specialrate i.e., 100 per cent, under the first proviso to section 32(1)(ii) of the Income-Tax Act, 1961, and thus treating that eachsingle item or constituent part of wooden shuttering materialform independent plant, i.e., “wooden shuttering”, within themeaning of Section 32(1) of the Act? It is not in dispute that the assessee had purchased various items for being used in the construction work. Individual bills had been filed. The value of each item wasbelong Rs.5,000. On this basis, the Tribunal has acceptedthe assessee’s claim. We find that the action is inconformity with the provisions of section 32(1)(ii) of theIncome-Tax Act, 1961, which permits 100 per cent.Allowance. The finding recorded by the Tribunal is purelyone of fact. No substantial question of law arises. In Raghavendra Constructions’ case (1 supra), recentlythis Court has taken a different view. The two judgments referredto above and certain others were cited before it. However, theBench expressed its inability to concur with them. The judgment of this Court in Sri Krishna Bottlers Pvt.Ltd.’s case (2 supra) was cited extensively before the Bench thatheard Raghavendra Constructions’s case (1 supra). One ofthe questions that was dealt with in Sri Krishna Bottlers Pvt.Ltd.’s case (2 supra) was whether each bottle that is used forserving a soft drink and the shells, in which they are arrangedqualify for 100% depreciation under Section 32 of the Act. Thematter was discussed in detail, obviously because the subjectwas almost untouched by that time. The judgment of theSupreme Court in Commissioner of Income Tax vs. Taj Mahal Hotel[[5]]and various judgments of the Courts in India andForeign Countries were discussed at length to draw support forthe conclusions. The purport of almost each and every judgmentthat was cited before their lordships was taken note of. Asregards bottles and shells, their lordships observed “The bottles containing the soft drink cannot be stock-in-trade inasmuch as the bottle by itself is not the subject of sale.The customer or the retailer returns back the bottle to theassessee after the soft drink is consumed. Likewise, the shellswhich are sent to the customer or dealer also come back withthe empty bottles and they cannot also be stock-in-trade. Whatis the function these bottles and shells perform in theassessee's trade ? Are they essentially tools in the assessee'sbusiness ? In our opinion, yes. The bottles are essential tools ofthe trade for it is through them that the soft drink is passed onfrom the assessee to the customer. Without these bottles, thesoft drink cannot be effectively transported, like the silos inSchofield v. R. and H. Hall Ltd. [1974] 49 TC 538 (CA), whichare used to store grain and to empty the same, performing a trade function. As pointed out in Dixon v. Fitch's Garage Ltd.[1975] 50 TC 509 (Ch D), the bottles and the contents are"totally interdependent." So are the shells. The bottles andshells also satisfy the durability test for it is nobody's case thattheir life is too transitory or negligible to warrant an inferencethat they have no function to play in the assessee's trade. Theyare therefore "plant" for the purposes of the Act. The principle that a "setting" in which the trade isconducted in not attracted to the facts of the case of all. Thebottles and shells have nothing to do with the building in whichthe trade in conducted nor with the "setting" in which it isconducted. Each bottle and each shell is an entity by itself andthey cannot be broker down into pieces for considering whetherthey have any part to play in the business of the assessee.Thebottles and shells are gross matter and, in fact, gross materialityis not a requirement at all for a thing to be treated as plant. For the aforesaid reasons, we agree with the decision ofthe Rajasthan High Court in CIT v. Jai Drinks (P.) Ltd. . Thatcase also related to bottles and shells, the assessee being aseller of soft drinks. The learned judges, after referring to the twoSupreme Court judgments referred to above, also referred to thedecision of the Delhi High Court in CIT v. National Air ProductsLtd. and of the Calcutta High Court in CIT v. Steel Rolling Millsof Hindusthan (P.) Ltd. , wherein it was held that "gas cylinders"fall within the definition of "plant". The fact that in the latter twocases, gas could not otherwise be transported especially bycylinders made for that purpose makes no difference.” At the end, the reference was answered in favour of theassessee and against the Department. However in Raghavendra Constructions’s case (1 supra), another Division Bench of this Court observed as under: “Applying the above principles, this Court held that thebottles and shells used by soft drinks bottling industry is“plant”. The Division Bench nowhere observed that each bottleor each shell would also be a plant for the purpose of section32(1)(ii).” It was proceeded as though in Sri Krishna Bottlers Pvt.Ltd.’s case (2 supra), each bottle and shell was not treated asunit qualifying for depreciation under Section 32(1)(ii) of the Act. This does not appear to be correct. The underlined portion of theJudgment in Sri Krishna Bottlers Pvt. Ltd.’s case (2 supra)makes this clear. Two difficult questions that crop up in this behalf are (a)choosing an appropriate precedent and (b) identification of the ratio laid therein. In fact, both happen to be different facets ofthe doctrine of stare descis.. The binding nature of a judgmentrendered by a superior Forum in a legal system, can hardly bethe subject matter of discussion. Slight difficulty arises mostly inrelation to the precedents coming from the Courts of co-equaljurisdiction. The precedent rendered by a Court is followed byanother Court of same status or jurisdiction, almost, as a matterof course. However, law does provide for making deviation froma precedent of that nature, in case it is found that it was renderedeither per encurium or sub silentio. Instances are not lacking,where these two doctrines are invoked, even in respect of theprecedents of superior Courts. The precedents can be treated as having been renderedsub silentio, if an otherwise binding precedent or a specificprovision of law was not taken note of. Generally, we do notcome across the instances of a judgment being treated as subsilentio, if the binding precedent is taken note of. However, if theratio emerging from a binding precedent was treated as non-existing and the judgment was rendered contrary to what wasdecided in the precedent, a situation may arise, where thejudgment so rendered almost resembles, the one done in subsilentio. The precedents can be treated as having been renderedsub silentio, if an otherwise binding precedent or a specificprovision of law was not taken note of. Generally, we do notcome across the instances of a judgment being treated as subsilentio, if the binding precedent is taken note of. However, if theratio emerging from a binding precedent was treated as non-existing and the judgment was rendered contrary to what wasdecided in the precedent, a situation may arise, where thejudgment so rendered almost resembles, the one done in subsilentio. It has already been demonstrated that the ratio in SriKrishna Bottlers Pvt. Ltd.’s case (2 supra), which is to the effectthat each bottle and shell deserve to be treated as independentunits and qualify for 100% depreciation was treated as non-existent at all in Raghavendra Constructions’ case (1 supra). Since both the judgments referred to above were rendered byDivision Benches only, we are faced with the problem ofchoosing, since there is conflict of views. Sir John Salmond in his Treatise on Jurisprudence, opinedas under: “where in fact a precedent is disregarded, this may taketwo forms. The court to which it is cited may either overrule it, ormerely refuse to follow it. Overruling is an act of superiorjurisdiction. A precedent overruled is definitely and formallydeprived of all authority. It becomes null and void, like arepealed statute, and a new principle is authoritativelysubstituted for the old. A refusal to follow a precedent, on the other hand, is an act of co-ordinate, not of superior, jurisdiction. Two courts of equal authority have no power to overrule eachother’s decisions. Where a precedent is merely not followed,the result is not that the later authority is substituted for theearlier, but that the two stand side by side conflicting with eachother. The legal antinomy thus produced must be solved by theact of a higher authority, which will in due time decide betweenthe competing precedents, formally overruling one of them, andsanctioning the other as good law. In the meantime the matterremains at large, and the law uncertain.” He proceeded to explain the doctrine of sub silentio asunder: “A decision passes sub silentio, in the technical sense thathas come to be attached to that phrase, when the particularpoint of law involved in the decision is not perceived by thecourt or present to its mind. The court may consciously decidein favour of one party because of point A, which it considers andpronounces upon. It may be shown, however, that logically thecourt should not have decided in favour of the particular partyunless it also decided point B in his favour; but point B was notargued or considered by the court. In such circumstances,although point B was logically involved in the facts andalthough the case had a specific outcome, the decision is not anauthority on point B. Point B is said to pass sub silentio.” In Shan Zahoor and others Vs.Vijayawada MunicipalCorporation[[6]], one of us (LNR,J) discussed some facets ofconcept of precedent as under: In Shan Zahoor and others Vs.Vijayawada MunicipalCorporation[[6]], one of us (LNR,J) discussed some facets ofconcept of precedent as under: A judgment of a Court operates as a precedent only forwhat it decides, known as ratio decidendi and not for its generalor casual observations, called obiter dicta. However, discerningor culling out the ratio decidendi of judgment is by no means asimple or easy task. Many a time, it would be difficult to state, witha semblance precision as to which portion of the judgmentrepresents the ratio decidendi and which, the obiter dicta. Theangle from which a precedent is examined makes a substantialdifference. In the process of answering the main issue or dealingwith the core of the dispute, passing observations are bound tobe made by the Court, here and there. Once the central issueinvolved in the case is identified, the view expressed by the Courton that issue deserves to be treated as the ratio decidendi. Theobservations in the process of reasoning, or disposal ofinconsequential and subsidiary issues, fall into the category ofobiter dicta. Where, the ultimate conclusions are summed up atthe end of the precedent; the Court before, which it is cited, is relieved of the difficulty in this regard. It is beneficial to refer to theview of some jurists, in this context. Sir John Salmond, in his treatise on jurisprudence, aptlyexplained the difficulties in identifying the ratio decidendi in aprecedent. He wrote as under: "While it is fairly simple to describe what is meant by theterm ratio decidendi, it is far less easy to explain how todetermine the ratio of any particular case. Though we knowthat it is the rule the Judge acted on, we cannot always tell forcertain, what that rule was. In some cases all we arepresented with is an order or judgment unsupported byreasons "of any sort. In others we are furnished with lengthyjudgments in which may be embedded several differentpropositions, all of which support the decision. Anotherdifficulty is that any general rule of law must ex hypothesirelate to a whole class of facts similar to those involved in thecase itself: but just what this class is will depend on howwidely we abstract the facts in question." Edgar Bodenheimer, in his book on jurisprudence,described the significance, and method of identification of ratiodecidendi as under: "(A) case is not controlling as a precedent for the sole reasonthat similarities and parallels between the facts of the earlierand later cases can be discerned. The ratio decidendi must bediscovered by relating the facts of the two cases to a principleof legal policy which reasonably covers both situations. Inmany instances, this principle of policy will not spring intoexistence as a finished creature the first time it is expressedby a Court. It will often have been stated by the Court in atentative and groping fashion, and its true import and scopewill not be capable of being ascertained until other Courts havehad a chance to correct the inadequacies of the firstformulation and to graft exceptions, qualifications, and caveatsupon the principle. In this way the ratio decidendi of a caseoften develops its true and full meaning slowly and haltingly,and it may take a whole series of decisions involvingvariations of the situation presented in the first case until a full-blown rule of law, surrounded perhaps by a cluster ofexceptions, replaces the tentatively and inadequatelyformulated generalization found in the initial decision. In short,a whole course of decisions will gradually mark out the outerlimits of a legal principle left indeterminate by the first decisionattempting to give form to it." The difficulty in distinguishing ratio decidendi from obiter dicta is explained by C.K. Allen, in his celebrated work "Law inthe Making", in the following terms: The difficulty in distinguishing ratio decidendi from obiter dicta is explained by C.K. Allen, in his celebrated work "Law inthe Making", in the following terms: "One of the greatest difficulties in its conception is thedistinction which is constantly drawn between ratio anddictum, the essential and the inessential. In the course of theargument and decision of a case, many incidentalconsiderations arise which are (or should be) all part of thelogical process, but which necessarily have different degreesof relevance to the central issue. Judicial opinions upon suchmatters, whether they be merely casual, or wholly gratuitous,or (as is far more usual) of what may be called collateralrelevance, are known as obiter dicta, or simply dicta, and it isextremely difficult to establish any standard of their relativeweight." Even where a ratio decidendi is identified in a precedent, it isnot as if it is to be imported in its entirety to the case on hand. Aneffort needs to be made to fit the ratio decidendi into the facts ofthe case under adjudication. An amount of elasticity exists in thisregard, which, in turn, would depend on the variation as to factsand circumstances. Dias, an acknowledged English Juristcompared the ratio in a precedent to a pellet of clay, andobserved as under: "The ratio of a case may be likened to a pellet of clay, which apotter can stretch and shape within limits. If he wants tostretch it, he can; or he can press it back into a pellet. A ratiocannot be stretched indefinitely any more than clay, for thereis a limit beyond which the generalization of the statement ofspecific facts cannot go." In a way, the situation referable to the discussion in thepreceding paragraphs obtains in the instant case also. In Young Vs. Bristol Aeroplane Company Limited (1944) 2All ER 293, the House of Lords held that the Rule of stare decisishas three exceptions namely; (1)If two decisions are in conflict, the Court of Appeal mustchoose between them.choose between them. (2)If a decision, although not overruled, is inconsistent with adecision of the House of Lords or of the Judicial Committeeof the Privy Council, the Court of Appeal is not bound by it.decision of the House of Lords or of the Judicial Committeeof the Privy Council, the Court of Appeal is not bound by it. (3)If a decision was given per incuriam, ie in ignorance of astatute or other binding authority, the Court of Appeal is notbound by it; nor may it be bound where the previous Courtstatute or other binding authority, the Court of Appeal is notbound by it; nor may it be bound where the previous Court had followed an incomplete report of a still earlier case. Theincuria rule does not apply where the previous Court, whichis alleged to have overlooked an earlier case, had in factalluded to it; nor does it apply where the earlier of theconflicting cases exerted only persuasive authority. In his treatise on Jurisprudence, R.W.M. Dias expressed the following view: “More serious is the implication of saying that two decisionsare in conflict. Logically the exception contradicts the rule. For, ifthe Court of Appeal propounds a rule in one case and a differentrule in another, the later of the two must either have been decidedin ignorance of the earlier, in which event it falls under the thirdexception and is accordingly invalid; or it must have violated therule that the Court is bound, in which event also it is invalid. Toassert that the Court may choose between them and perhapsprefer the later case is in effect to escape from the rule itself byaccording validity to the very case which has violated it.” In his treatise on Jurisprudence, R.W.M. Dias expressed the following view: “More serious is the implication of saying that two decisionsare in conflict. Logically the exception contradicts the rule. For, ifthe Court of Appeal propounds a rule in one case and a differentrule in another, the later of the two must either have been decidedin ignorance of the earlier, in which event it falls under the thirdexception and is accordingly invalid; or it must have violated therule that the Court is bound, in which event also it is invalid. Toassert that the Court may choose between them and perhapsprefer the later case is in effect to escape from the rule itself byaccording validity to the very case which has violated it.” The discussion can be further prolonged on academiclines. The effort is only to drive home the point that if a Court isplaced with two precedents rendered by itself, one in conflict withthe other, it has every right to choose as between the two and bydoing so, it does not do any violence to the other. At the most, itmay be an occasion for the superior Court to resolve the rule onostensible conflict. Applying these principles, we prefer to followthe ratio in the judgment of this Court in Sri Krishna BottlersPvt. Ltd.’s case (2 supra) than to be guided by the judgment inRaghavendra Constructions’ case (1 supra). A legally binding precedent has its own strength and itdoes not depend upon the views of the Authors of Books andother persons connected with law. However, the view expressedin an otherwise respected Treatise cannot be ignoredaltogether. Though it may not effect the binding nature of theprecedent, it may appeal in its own way to the Courts, whereversuch a precedent is cited. It hardly needs any emphasis thatKanga & Palkhivala’s ‘The Law and Practice of Income Tax’ is ahighly respected Treatise on the subject. In the Tenth Edition ofthe book at page No.735, the judgment of this Court inRaghavendra Constructions’ case (1 supra) was referred toand the following observation was made: “The High Courts held that shuttering and centeringmaterial constitutes a “plant” but the Andhra Pradesh HighCourt took a contrary view. Its reasoning is, it is submittedcontrary to elementary and well settled principles of what isa plant. The court observed: “If a thing is durable andfunctional utility in the business of the assessee, it is aplant. If it is durable but cannot effectively stand alonewithout functional integration with other similar or otherdissimilar components or units, it would not qualify a ‘plant’. It is difficult to make any sense of this wholly unwarrantednew test of functional integration.” Though we concede to the authors the right to expresstheir reservation about the correctness of a Judgment, with duerespect to them, we are of the view that the disagreement couldhave been expressed in more delicate manner, notwithstandingtheir concern about uncertainty in law. On our part, we are onlymaking an effort to recognize certain aspects of law, which havealready been propounded, than pointing out mistakes. On merits also, we are convinced that the ‘irreducibleminimum’ for the shuttering material is the individual plates, forproviding support to the reinforced concrete and cement or thepoles and bars that are used at the time of formation. Wechoose to fall in line not only with the judgment of this Court in SriKrishna Bottlers Pvt. Ltd.’s case (2 supra), which in turn hasdrawn its conclusion based upon the judgment of the SupremeCourt in Commissioner of Income Tax vs. Taj Mahal Hotel, butalso the judgments rendered by the other High Courts. We accordingly dismiss the appeal. The miscellaneous petition filed in this appeal shall alsostand disposed of. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY, J ______________________ CHALLA KODANDA RAM, J Date: 27.11.2014Note: L.R.Copy to be marked.JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM We accordingly dismiss the appeal. The miscellaneous petition filed in this appeal shall alsostand disposed of. There shall be no order as to costs. ____________________ L.NARASIMHA REDDY, J ______________________ CHALLA KODANDA RAM, J Date: 27.11.2014Note: L.R.Copy to be marked.JSU THE HON’BLE SRI JUSTICE L.NARASIMHA REDDYAND THE HON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A.No.239 of 2003 Date: 27.11.2014 JSU [1](2011) 332 ITR 0235(AP) [2](1989) 175 ITR 0154 (AP) [3](1998) 229 ITR 0776 (All) [4](2002) 256 ITR 0320(2002) 256 ITR 0320 [5](1971) 082 ITR 0044(SC)(1971) 082 ITR 0044(SC) [6]2004(4) ALT 7812004(4) ALT 781