Page 154 - GSTL_3rd September 2020_Vol 40_Part 1

88 GST LAW TIMES [ Vol. 40
it performs. The functional test is, therefore, essential at any rate as
a preliminary”.
(7.6) Indian Courts as well as English Courts, depending upon the con-
text of law, have treated even the assets like dry dock, silos built in the
shipyard freezing chamber in the case of cold storage, cinema building, etc.
as falling within the definition of ‘Plant’.
- “IRC v. Barclay, Curle and Co. Ltd. [1970] 76 ITR 62 (HL). The
question that arose for consideration was whether a dry dock
could be construed as plant for the purposes of the trade of
the company within Section 279(1) of the English Act. In that
case, the dry dock had been made, the walls and bottom of
which had to be strong and impervious to water so that large
vessels could get into it for the purposes of repairs. In the
facts and circumstances of the said case, it was held that the
entire dry dock together with the ancillary structures consti-
tuted plant.
- In Schofield v. R. and H. Hall Ltd. [1974] 49 TC 538 (CA) con-
cerning silosbuilt in the shipyard. The company carried on a
trade which consisted of storage of grain. The question was
whether the silos is part of the setting in which such trade
was carried on. It was found that considering the function of
the silos in relation to the assessee’s trade, the silos served as
an essential part of the overall trading activity. Their function
was to hold the grain in a position from which it could be
conveniently discharged in varying quantities. Hence, it was
held that the silos would rank for capital allowance.
- In CIT v. Kanodia Cold Storage, the question was whether the
building with insulated walls used as a freezing chamber, though it
is not machinery or part thereof, is part of the air-conditioning
plant of the cold storage of the assessee, entitled to special de-
preciation on its written down value. In the specific facts of
the case, the whole freezing chamber including walls and structure
was held to be a plant with which the assessee was carrying on
his business activity. On the analogy of the above cases. Sri
Prasad, Learned Counsel for the assessee, contended that the
whole theatre should be treated as plant with which the as-
sessee carries on his show business.
- In Benson v. Yard Arm Club Ltd. [1978] 2 All ER 958, 968;
[1979] Tax LR 778, 785 (ChD), the subject-matter was a ship
which was converted into a restaurant by the assessee. The whole
ship was claimed as an apparatus for carrying on their business of a
floating restaurant, and as such it was a plant to claim allowance.
On a review of various earlier decisions, the Chancery Divi-
sion has held that the vessel is the place or setting where the
restaurant business was carried on and was not plant and
hence, the expenditure on them did not qualify for capital al-
lowance.”

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