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PETITIONER: C.I.T., BOMBAY

       Vs.

RESPONDENT: GWALIOR RAYON SILK MANUFACTURING CO. LTD.

DATE OF JUDGMENT29/04/1992

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. KASLIWAL, N.M. (J)

CITATION:  1992 AIR 1782            1992 SCR  (2)1017  1992 SCC  (3) 326        JT 1992 (3)   158  1992 SCALE  (1)1000

ACT:              Income Tax Act 1961 : Section 32.      Income Tax (Fourth Amendment) Rules 1983.      Depreciation allowance-Nature and object of.      Roads and drains-Land within factory premises-Necessary adjuncts  to  factory buildings-Treated  as  ‘building’  for purposes of depreciation.      Statutory Interpretation :      Taxing  statutes-Provision for deduction, exemption  or relief-to   be  construed  reasonable  and  in   favour   of assessee.      Administrative Law :      Subordinate  legislation-Rules validly made  have  same force as sections of Act.      Practice and Procedure      Interpretation  consistently given over  years-Accepted and  acted upon by department-Normally not to be  upset-Even though  different  view of law  reasonably  possible  unless perceptions and circumstances warrant fresh look.      Words  and  Phrases-Meaning  of  ‘building’-Section  32 Income-tax Act 1961.

HEADNOTE:      The assessee-respondent in the appeal Civil Appeal  No. 2916(NT)  of 1980 claimed depreciation on the  written  down value of roads constructed by it as forming part of the cost of the factory building and also claimed development  rebate on industrial transport used for transporting raw  materials and finished goods within the factory premises                                                        1018      The Income-tax Officer having disallowed the  aforesaid claims,  the  assessee appealed to the  Appellate  Assistant Commissioner who dismissed the appeals.      On  further appeal the Tribunal allowed the claims  and depreciation  on the roads as well as development rebate  in regard to the transport viz., tractor, trailer etc.      The  Revenue filed an application under Section  256(1) of  the  Income-tax  Act,  1961 but  the  same  having  been dismissed by the Tribunal, filed an application under Section 256(2) in the High Court, which accepted the application  in regard  to the question of development rebate, but  rejected

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it with regard to the depreciation on roads.      The  Revenue filed Special Leave Petition  against  the orders of the High Court in this Court, contending that  the word   ‘building’  in  its  connotation  is  referable    to something that has been constructed as a structure or super- structure on land with walls and roof, and since the Income- tax Act did not give a definition of its own, the dictionary meaning  of the word ‘building’ has to be adopted, and  that this  was  made  manifest by  the  subsequent  amendment  to Appendix  I under the Income-tax, 4th Amendment Rules,  1983 which came into force with effect from 2nd April, 1983 which includes roads.      The  assesses  contested the appeal. It  was  contended that the purpose of allowing depreciation was to compute the net  taxable income,; that unless roads are laid it  is  not possible  for  the convenient carrying on  of  the  business activity,   that  the  assessee  laid  roads  and   incurred expenditure  thereon, and therefore the roads form  part  of the  building  as  capital asset  which  is  admissible  for depreciation  under  Section 32 of the Act. It  was  further contended  that  the  Rules  only  regulate  the   rate   of depreciation  at which the assessee is entitled to and  that proceeding  the Fourth Amendment Rules with effect from  2nd April,  1983, the rates were variable and the assessee  were entitled to claim either as plant or building etc. To set at rest  that part of the controversy the  Rules  were  amended and came into force with effect from April 2, 1983.      In  this and the connected appeals the common  question of  law  arose: whether ‘building’ under section 32  of  the Income-tax Act, 1961 would include roads and drains.                                                        1019      Dismissing the Appeals, this Court,      HELD : 1. The roads laid within the factory premises as links  or providing approach to the buildings are  necessary adjuncts  to the factory building to carry on  the  business activity  of  the  assessee would  be  building  within  the meaning  of section 32 of the Act. The  capital  expenditure incurred  thereon is admissible to depreciation  of  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  Appendix.  Equally the drains also  would  be  an integral  part of 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. [1030 C-E]      2.(a).  The expressions used in a taxing statute  would ordinarily  be  understood  in  the sense  in  which  it  is harmonious with the object of the statute to effectuate  the legislative animation. [1026 G]      2(b). The Income-tax Act has to be read and  understood according  to  its  language. If the plain  reading  of  the language  compels the court to adopt an  approach  different from  that dictated by any rule of logic the court may  have to adopt it. [1027 A]      Raja  Jagadambika  Pratap  Narain  Singh  v.  C.B.D.T., [1975]  100  ITR 698 and Azam Jah Bahadur (H.H.  Prince)  v. E.T.O., [1983] 72 ITR 92, referred to.      3.   Logic  alone  will  not  be  determinative  of   a controversy  arising  from taxing statute.  Equally,  common sense is stranger and incompatible partner to the income-tax Act.  It  is  not concerned itself with  the  principles  of morality  or ethics. It is concerned with the  very  limited question as to whether the amount brought to tax constitutes

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the income of the assessee.                                                     [1027 B]      4.  If  the language is plain and unambiguous  one  can only  look fairly at the language used and interpret  it  to give  effect to the legislative animation. Nevertheless  tax laws  have  to be interpreted reasonably had  in  consonance with  justice  adopting purposive approach.  The  contextual meaning has to be ascertained and given effect to. [1027 C]      5. A  provision  for deduction,  exemption  or  relief should be construed                                                        1020 reasonably  and in favour of the assessee. The object  being that in computation of the net income, the statute  provides deductions,  exemptions or depreciation of the value of  the capital assets from taxable income. [1027 D]      6. Building which have not been specifically defined to include road in the Act must taken in the legal sense. [1027 D]      7.  Section 32 provides depreciation of capital  assets in  respect  of buildings, machinery,  plant  or  furniture. [1027 E]      C.I.T. v. Taj Mahal Hotel, [1971] 82 ITR 44;  Municipal Corporation   of  Greater  Bombay  &  Ors.  v.  Indian   Oil Corporation Ltd., JT (1990) 4 SC 533 and C.I.T. v. Ram Gopal Mills Ltd., 4 ITR 280, referred to.      8. Depreciation allowance is in respect of assets  used in the business and has to be calculated on the written down value.  The  allowance  towards  depreciation  is  for   the continuation  of  the use of the assets wholly  or  in  part during  the  accounting  year and its  contribution  to  the earning of the income. The object is to determine net income liable to tax. [1027 G]      C.I.T. v. Alps Theatre, [1967] 65 ITR 377, explained.      9.  Dictionary  meaning  of the  ‘building’  cannot  be confined to a structure or superstructure having walls   and 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 the depreciation must be allowed. [1028 E-F]      10.  While amending the Income-tax 4th Amendment  Rules 1983, the rule making authority accepted the  interpretation consistently  laid down by various High Court 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. [1029 C]      11.  The inclusive definition of ‘building’ to  include roads  etc.  enlarges the scope of Section 32 and  does  not whittle down its effect. [1029 D]      C.I.T.  v. Coromandel Fertilsers Ltd., [1985]  156  ITR 283, (A.R.) over-                                                        1021 ruled;  C.I.T.  v.  Sanavik Asia Ltd., [1983]  144  ITR  585 (BOM.);  C.I.T.  v.  Clour Chem Ltd., [1977]  106  ITR  323; C.I.T. v. Lucas-TVS Ltd., [1977] 110 ITR 346 (Mad.);  Panyem Cement  and Chemical Industries Ltd. v. Addl C.I.T.,  [1979] 117  ITR 770 (A.P.); C.I.T. v. Kalyani Spinning Mills  Ltd., [1981]  128 ITR 279 (Cal.); C.I.T. v. Mec. Gaw  Laboratories India (Ltd.), [1981] 132 ITR 401 (Guj.); C.I.T. v. Bangalore Turf Club Ltd., (150 ITR 23,) approved.      12. An interpretation consistently given over the years

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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   perceptions   and circumstances warrant fresh look. [1030 A]      Saharanpur  Electric Supply Co. Ltd. v. C.I.T.,  [1992] 194 ITR 294, referred to.

JUDGMENT:      CIVIL  APPELLATE JURISDICTION  : Civil Appeal No.  2916 (NT) of 1980.      From  the  Judgment  and Order dated  9.3.1979  of  the Bombay High Court in I.T.A. No. 43 to 1979                             WITH      C.A. Nos. 1194/77, 2978/89, 5535/90 & 1404 of 1991.      S.C. Manchanda, S. Rajappa, Ms. A. Subhashini and  K.P. Bhatnagar for the Appellant.      Harish  N. Salve, S. Kukumaran, Mukul Mudgal,  T.  Ray, Krishna Kumar, Mrs. P. Madan, N. Talwar, A.D.N. Rao and A.S. Rao for the Respondent.      The Judgment of the Court was delivered by      K.  RAMASWAMY, J. The assessee claimed depreciation  on the written down value of roads constructed by it as forming part  of the cost of the factory building and  also  claimed development   rebate   on  industrial  transport   use   for transporting  raw  materials and finished goods  within  the factory  premises.  The I.T.O. disallowed  the  claims.  The assessee  went in appeal. The  A.A.C. dismissed the  appeal. On  a  further appeal the Tribunal   following  its  earlier order for assessment year 1962-63 in the case of the                                                        1022  assessee,  allowed the aforesaid two claims with regard  to depreciation on the roads as well as rebate on the Tractors, Trailors  etc.  The  revenue  filed  an  application  under Section  256(1). The said application was dismissed  by  the Tribunal.  The revenue then filed application under  Section 256(2)  in  the  High Court. The High  Court   accepted  the application  with regard two questions only and rejected  it so  far as the question regarding depreciation on  roads  is concerned.  The revenue filed SLP against the order  of  the High  Court.  This Court by order  dated  5.12.1980  granted special leave confined to question No. 1 only which reads as under:-          "Whether  on the facts and in the circumstances  of          the  case, the Appellate Tribunal was justified  in          law  in holding that depreciation is admissible  on          the W.D.V. of the cost of construction of roads  in          the  factory  premises  on the  footing  that  they          constitute building?"                Civil Appeal No. 1194 of 1977      C.I.T., Bombay                           ...Appellant              v.     M/s Electro Metallurgical Works Pvt. Ltd. ...Respondent      The  Appellate  Assistant  Commissioner  directed   the I.T.O.  to  allow depreciation on roads inside  the  factory compound  at  appropriate rates. It was claimed  before  the A.A.C.  that roads within the factory  compound  constituted plant  and  the  I.T.O. should be  allowed  depreciation  as admissible  for buildings. It was not clear from  the  order of  the  A.A.c. whether depreciation was to  be  granted  on roads  at the rates applicable to plant and machinery or  at the  rates  applicable  to  building.  The  Tribunal   while deciding  the appeal filed by the revenue observed  that  it was not concerned with the above aspect regarding the rates.

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The  Department’s  claim  was that no  depreciation  at  all should  be given on roads. The Tribunal held that  different benches  of the Tribunal at Bombay had taken the  view  that depreciation on roads inside the factory compound connecting different  factory buildings and connecting the  factory  to the outer road should be allowed either on the footing  that such   roads  are a part of the buildings  or  alternatively that  they  constituted plant. The Tribunal thus  held  that A.A.C.  was justified in directing the I.T.O. to  grant  the necessary depreciation                                                        1023 The appeal of the revenue was dismissed. The revenue filed a petition  under  Section  256(1). The  question  number  one related  to  calculating  the  reliefs  under  Section  80-I without  taking into consideration the  development  rebate. The  second question related to allowing of depreciation  on roads inside the factory at appropriate rates. The  Tribunal with  regard  to second question held that the  Bombay  High Court  itself in the case of Colour Chem Ltd. had taken  the view  that depreciation should be granted on the roads.  The Tribunal   in  these  circumstances  did  not  consider   it worthwhile  to  refer the second question.  As  regards  the first  question  also with which we are  not  concerned  the Tribunal  did not  consider it worthwhile for referring  the same  to the High Court. The revenue then filed  a  petition under  Section 256 (2) in the High Court. In  this  petition paragraph 7 it has been stated as under:-          "so  far  as  question  No.  2  is  concerned,  the          department  has  since decided not  to  pursue  the          matter  further.  In  the prayer  clause  also  the          direction  to  the Tribunal to state the  case  and          refer  the question of law was made in  respect  of          question No. 1 only."      The  High  Court by order dated June  17,  1979  issued notice  as  regards question No. 1 only  and  dismissed  the application  so  far  as question No. 2  is  concerned.  The revenue  in  the above circumstances field SLP  against  the order dated June 17, 1979 and leave was granted.                Civil Appeal No. 2978 of 1989      C.I.T.                                     ...Appellant        v.      M/s. Hindustan Aeronautics Ltd             ...Respondent      I.T.O.  disallowed the claim for depreciation on  roads and drains for the assessment year 1977-78. The Commissioner Income-tax (Appeals) allowed the depreciation following  the decision  of the Bombay High Court in C.I.T. v. Colour  Chem Ltd., (106 ITR 323) and Madras High Court decision in C.I.T. v. Loockers TVs Ltd., (110 ITR 346). The Tribunal  dismissed the  appeal filed by the revenue. The Tribunal rejected  the reference  application  filed under Section 256  (1).  On  a reference  application  filed by the revenue  under  Section 256(2), the High Court directed the                                                        1024 Tribunal to state the case and refer the question of law for its  opinion.  The High Court followed its earlier  decision in  C.I.T.  v. Bangalore Turf Club case, (150  ITR  23)  and answered the question against the revenue.  The question  of law raised was whether on the facts and in the circumstances of  the  case,  the Appellate Tribunal is right  in  law  in holding that the assessee is entitled to depreciation on the written  down  value  of  roads  and  drains  at  the  rates applicable to buildings.                     Civil Appeal No. 5553 of 1990      C.I.T., Bangalore                        ...Appellant       v.

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    M/s. Hindustan Aeronautics Ltd.          ...Respondent      I.T.O. allowed depreciation on roads and drains in  the original  assessment for the assessment year 1973-74  C.I.T. set   aside   order  of  the  I.T.O.  under   Section   263. Reassessment by the I.T.O. disallowing the assessee’s  claim for  depreciation on roads and drains to the extent  of  Rs. 15,50,526.   On  appeal  the C.I.T.  (Appeals)  allowed  the assessee’s  claim for depreciation.  The Tribunal  dismissed the  appeal of the revenue.  At the instance of the  revenue on a reference under Section 256(1) the High Court  answered the  question against the revenue.  The High Court by  order dated  October 25, 1983 answered the question in  favour  of the  assessee  relying on its earlier decision  reported  in C.I.T. v. Bangalore Turf Club Ltd., (150 I.T.R. 23)                     Civil Appeal No. 1404 of 1991           The Commissioner of Income Tax     ....Appellant                     .                I.D.L. Chemicals Ltd.         ....Respondent      I.T.O.  rejected the claim for depreciation  on  roads. A.A.C.  allowed depreciation on roads treating the  same  as buildings.   The Tribunal relying on its earlier order  held that  depreciation  on roads should be allowed  by  treating them  as  plant.  On reference  applications,  the  Tribunal referred two questions to the High Court for its opinion (1) whether the assessee                                                        1025 was entitled to depreciation on roads as part of the  plant, (2)  whether the assessee was entitled to  depreciation  for the assessment year 1972-73 on the written down value of the sum  of Rs. 3,41,595 referred in question No. 1 and also  on the  questions to plant and machinery of Rs.  1,52,767  made during  the previous year relevant for the  assessment  year 1971-72.  The High Court by order dated 12.10.1984 held that the same covered by a consolidated order passed on June  15, 1983   in  favour  of  the  assessee.   The  question   was, therefore answered against the revenue and in favour of  the assessee.   As regards the second question, High Court  held that  it was covered as a result of an amendment to the  Act which has been noted in R.C. No. 80/78 dated April 18, 1983. The  answer was therefore recorded against the assessee  and in  favour  of the revenue.  In the SLP, it is  stated  that both  the questions referred to were answered in  favour  of the assessee which is not correct.      Since this bunch of appeals raised common questions  of law for decision, they are disposed of by a common judgment. The  facts  in Civil Appeal No. 2916/80 are  sufficient  for decision.   Hence  they are extracted.  For  the  assessment year 1963-64 for the previous year ending 31st March,  1963, the  respondent assessee, a company incorporated  under  the Company’s Act claimed depreciation on the roads  constructed by it as forming part of cost of the factory building.   The Income-tax  Officer and on an appeal the  Asstt.   Appellate Commissioner   rejected  the  claim.   On  further   appeal, following the decision of the Bombay High Court for previous year,  the  Tribunal allowed the appeal and  held  that  the assessee  is  entitled to depreciation.   Then  the  revenue sought for reference on the question:          "Whether  on the facts and in the circumstances  of          the  case the Appellate Tribunal was  justified  in          law in holding that the depreciation was applicable          on   the  written  down  value  of  the   cost   of          construction  of roads in the factory  premises  on          the footing that they constitute building?"      The High Court by it impugned order under s. 256(2)  of the  Income-tax  Act, 1961 for short ‘the Act’  declined  to

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call for a reference.      The  contention of Sri Manchanda, learned  counsel  for the Revenue, is that the word "building" in its  connotation is  referable  to  something that a  constructed  one  as  a structure or super-structure on land with walls and                                                        1026 roof. According to the counsel since the Act did not give  a definition  of  its  own,  the  dictionary  meaning  of  the "building"  which means "a house or anything which  built  a structure"  is  to  be adopted which was  made  manifest  by subsequent  amendment  to appendix I under  Income-tax,  4th Amendment Rules, 1983 for short ‘the Rules’ having come into force with effect from 2nd april, 1983 which includes roads. Therefore, till 2nd April, 1983 the roads did not form  part of  the  building.  It is also further  contended  that  the Rules  made  manifest  that they would  be  applicable  only prospectively   from   2nd  April,   1983.    By   necessary implication till that cut off date the legislature  excluded roads  from  the connotation of the building.   The  capital expenditure incurred by an assessee on construction of  road even within factory premises is not entitled to depreciation as  a deduction in the computation of profits and  gains  of assessee’s  income of the previous year.  Sri Harish  Salve, the  learned senior counsel and other counsel appearing  for the assessees resisted the contention.  Sri Salve  contended that the purpose of allowing depreciation is to compute  the net taxable income; unless roads are laid it is not possible for the convenient carrying on of the business activity, the assessee  laid  roads  and  incurred  expenditure   thereon. Therefore, the roads form part of building as capital  asset which is admissible for depreciation under s. 32 of the Act. The  Rules only regulate the rate of depreciation  at  which the  assessee is entitled to.  Preceding the  4th  Amendment Rules  with  effect  from 2nd April, 1983,  the  rates  were variable and the assessees were entitled to claim either  as plant  or  building etc.  To set at rest that  part  of  the controversy the rules were amended and came into force  with effect  from 2nd April, 1983.  The  subordinate  legislature gave  effect  to the interpretation given  by  various  High Courts  to the word building which included roads  as  well. Sri  Manchanda further contended that taxing statute  should be strictly construed; common sense approach, equity, logic, ethics and morality have no role to play.  The words in  the taxing  statute  should  be  given  literal  interpretation. Nothing  is to be read in, nothing is to be implied; one can only  look fairly at the language used and nothing more  and nothing less.      It is settled law that the expressions used in a taxing statute would ordinarily be understood in the sense in which it  is  harmonious  with  the  object  of  the  statute   to effectuate  the legislative animation.  In Raja  Jagadambika Pratap  Narain Singh v. C.B.D.T., [1975] 100 ITR  698,  this Court  held that "equity and income-tax have been  described as  strangers".   The  Act from the very  nature  of  things cannot absolutely cast upon logic.                                                        1027 It  is to be read and understood according to its  language. It  the plain reading of the language compels the  court  to adopt  an approach different from that dictated by any  rule of  logic the court have to adopt it, vide Azam Jah  Bahadur (H.H. Prince) v. E.T.O., [1983] 72 ITR 92. Logic alone  will not be determinative of a controversy arising from a  taxing statute.  Equally, common sense is stranger and incompatible partner  to the Income-tax Act.  It is not concerned  itself with the principles of morality or ethics.  It is  concerned

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with  the  very limited question as to  whether  the  amount brought  to tax constitutes the income of the assessee.   It is  equally  settled law that if the language is  plain  and unambiguous  one can only look fairly at the  language  used and   interpret  it  to  give  effect  to  the   legislative animation.   Nevertheless  tax laws have to  be  interpreted reasonably and in consonance with justice adopting purposive approach.  The contextual meaning has to be ascertained  and given  effect to.  A provision for deduction,  exemption  or relief  should be construed reasonably and in favour of  the assessee.   The object being that in computation of the  net income,  the  statute  provides  deductions,  exemptions  or depreciation of the value of the capital assets from taxable income.    Therefore,   building   which   have   not   been specifically  defined  to include road in the  Act  must  be taken in the legal sense.      The  question  emerges, therefore,  whether  roads  and drains include building under s. 32 of the Act.  Section  32 provides  depreciation  of  capital  assets  in  respect  of buildings,  machinery,  plant or furniture.  This  Court  in C.I.T.  v. Ram Gopal Mills Ltd. (41 I.T.R. 280),  held  that "the  basic and normal scheme of depreciation under the  Act is  that it decreases every year being a percentage  of  the written  down  value which in the first year is  the  actual cost  and  in  succeeding years the  actual  cost  less  all depreciations  actually  allowed under the act  or  any  act repealed  thereby".  The depreciation allowance,  therefore, is in respect of such assets as are used in the business and each  to  be  calculated on the  written  down  value.   The allowance  towards depreciation is for the  continuation  of the  use  of  the  assets  wholly  or  in  part  during  the accounting  year and its contribution to the earning of  the income.   The  object is to determine net income  liable  to tax.  In C.I.T. v. Alps Theatre, [1967] 65 ITR 377,  heavily relied on by the revenue this Court considering s. 10(2)  of the  Income-tax Act, 1922 held that s. 10(2)  provides  that such profits or gains shall be computed after making certain allowances.   The  object of giving these allowances  is  to determine  the assessible income.  Therein the question  was whether the                                                        1028 land  on  which the theatre was constructed  is  a  building within the meaning of s. 10(2) of the Income-tax Act,  1922. This court held that land is not a building and,  therefore, depreciation   allowance   for  land   separately   is   not admissible.   The ratio  therein has no application but  the principle  laid  would  be considered in the  light  of  the purpose of the Act.  In C.I.T. v. Taj Mahal Hotel, [1971] 82 ITR  44,  this court adopting purposive approach  held  that sanitary and pipeline fittings fell within the definition of plant.   1922 Act intended to give wide meaning to the  word "plant".   The  rules  are  meant  only  to  carry  out  the provisions of the Act and cannot take away what is conferred by  the  Act or whittle down its effect.  In  the  Municipal Corporation   of  Greater  Bombay  &  Ors.  v.  Indian   Oil Corporation  Ltd.,  JT (1990) 4 SC 533, the  oil  tanks  for storage  of  petrol were held to be  buildings  exigible  to property tax.      The question whether the roads would include within the meaning of the word buildings was considered by various High Courts.  The leading decision is of the Bombay High Court in C.I.T.  v.  Colour  Chem Ltd., [1977] 106  ITR  323.   While negativing the contention that roads are part of the  plant, the Bombay High Court held that the roads within the factory premises are used for the purpose of carrying raw materials,

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finished  products  and  workers.   Therefore,  it  must  be regarded as building or buildings within the meaning of sub- clause  (iv) of s.10(2) of 1992 Act.  It was also held  that dictionary meaning of the word "building" cannot be confined to a structure or superstructure having walls and 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  the depreciation must be allowed.  The appeal filed against  the judgment  in Colour Chem Ltd. case the leave was refused  on the  grounds  of delay.  More or less though  for  different reasons  on "common sense principle" same is the  ration  in C.I.T.  v. Locas-TVS 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 Panyem Cement and Chemical Industries Ltd. v. Addl. C.I.T.,  [1979] 117  ITR 770 (A.P.); C.I.T. v. Kalyani Spinning Mills  Ltd., [1981]  128 ITR 279 (Cal.); C.I.T. v. Mec. Gaw  Laboratories India  (Ltd.),  [1981]  132  ITR 401  (Guj.).  In  C.I.T  v. Bangalore  Turf Club Ltd., 150 ITR 23, when the  appeal  was filed this court dismissed the same in Special                                                        1029 Leave petition Nos. 5198-99/85 dated December 16, 1987.      In Permanent Words and Phrases, Vol. 5A ‘building’  was defined  that  every thing that 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.      While amending Income-tax 4th Amendment Rules 1983, the rule   making   authority   accepted   this   interpretation consistently  laid  by  various High  Courts  that  building includes  roads and also alongated 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  the  building  to include roads etc. enlarges the scope of s. 32 and does  not whittle  down  its  effect.  It is true that  in  C.I.T.  v. Coromandel Fertilisers Ltd., [1985] 156 ITR 283, (A.P.), the High  Court  of Andhra Pradesh interpreted that  roads  fell within  the meaning of "Plant" and granted  depreciation  at the  rates admissible to plant.  In C.I.T. v.  Sanavik  Asia Ltd., [1983] 144 ITR 585 (Bom.), took opposite view and held to be building.  In view of the consistent view of the other High  Courts and in our view which is the correct  one,  the view of the High Court of A.P. is not correct in law.      It  is  true,  as contended for the  Revenue  that  the Income-tax  4th Amendment Rules 1983 were given effect  from 2nd April, 1983 thereby manifested that the rates enumerated in  the  rules would be applicable  prospectively  from  the later  assessment years.  It 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 the Parliament to expressly brought  out  an amendment  to the Act to that effect.  On the other hand  we are  of the view that the subordinate  legislature  accepted

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the  interpretation  given by the High Courts  and  included roads  as integral part of the building.  In Bangalore  Turf Club  Ltd.  case 150 ITR 23, the Karnataka High  Court  held that the amendment was by way of clarification in confirmity with the law laid by the High Courts.  It is also                                                        1030 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 fresh look.  The ratio in Saharanpur Electric Supply Co. Ltd. v. C.I.T., [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.      Accordingly  we  have no hesitation to  hold  that  the roads laid within the factory premises as links or  provided approach  to  the buildings are necessary  adjuncts  to  the factory  buildings to carry on the business activity of  the assessee  would be building within the meaning of s.  32  of the  Act.   The  capital  expenditure  incurred  thereon  is admissible to depreciation of written down value.  It has to be  worked  out for the purpose of depreciation as  per  the provision  of  the  Act read with  the  Rules  in  appendix. Equally  the  drains  also  would be  an  integral  part  of 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 s. 32 of the Act read with the rules in the Appendix.  In view of the settled position the reference sought for in  CA No. 2916/80 and CA No. 1194/77 is unnecessary.  The  appeals are accordingly dismissed. No costs.      CIVIL APPEAL NO. 1404/91      The appeal is partly allowed.  The I.T.O. would compute roads   as  building  and  depreciation  should   be   given accordingly.   In view of the circumstances the parties  are directed to bear their own costs.      Civil Appeal Nos. 2978/89 & 5535/90      The Civil Appeals are dismissed. No. costs. N.V.K.                                   Appeals dismissed.                                                        1031