SIDDHARTH AGENCIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WHETHER the building in which eggs produced by the hens is a factory building in respect of which higher depreciation at double the normal rate should be allowed is the question referred to us by the Tribunal at the instance of the assessee. The assessment year is 1982-83.

(2.) IT is obvious that eggs are the result of a natural biological process, and are not an article of manufacture. The buildings in which this natural biological process occurs is the environment, though controlled, within which the process occurs. The owner of the building docs not contribute in any way to the production, except to provide the feed and to preserve the health of the poultry. The eggs are preserved and protected by the owner of the hatchery, but he has no role to play in the occurrence of the biological event.

(3.) THE hatchery not being an industrial undertaking and the eggs produced not being the result of any manufacture or of any process carried out by the owner of the hatchery, the buildings in which the hens are housed cannot be regarded as factory buildings. THE Tribunal was, therefore, right in holding that the buildings of the assessee were not to be allowed depreciation at the higher rate.