1. The assessee was the owner of 16 motor-lorries which were run on petrol. In the years of account 2009-2010 he replaced the petrol engines by diesel engines at a total cost of Rs. 97,996. The cost of installing diesel engines represented approximately half the value of the motor-lorries. Before the Income-tax Officer, the assessee claimed initial depreciation in respect of these diesel engines under section 10(2) (vi), paragraph 2. The Income-tax Officer disallowed the claim and that order was confirmed by the Appellate Tribunal.
2. In this reference, Mr. S. P. Mehta, who appears on behalf of the assessee, contends that the assessee has been granted normal depreciation under paragraph 1 clause (vi) of section 10(2) and there is no reason why he should not be entitled, in respect of the same engines, to initial depreciation under paragraph (2). Mr. Mehta seeks to support this argument by referring to rule 8 in the schedule which has been framed under the Indian Income-tax Act. He also submits that if a diesel engine which is installed in a motor-lorry is regarded as 'plant' within the meaning of sub-section (5) of section 10 for the purpose of allowing normal depreciation, there is no rational ground for holding that it is not plant for the purpose of allowing initial depreciation. Under clause (vi), in so far as it is material, by the first paragraph it is provided that in respect of depreciation of 'such buildings, machinery, plant or furniture', a sum equivalent to such percentage on the original cost thereof may be allowed to the assessee as may in any case or class of cases be prescribed; and the expression 'such buildings, machinery, plant or furniture', having regard to the terms of clause (vi) must mean 'buildings, machinery plant or furniture used for the purpose of business, profession or vocation of the assessee'. Paragraph one enables the assessee to claim what is called 'normal depreciation'. By paragraph 2 it is provided, in so far as its is material, that where the buildings have been newly erected, or the 1945, (and before the 1st day of April, 1956) a further sum in respect of the year of erection or installation equivalent to the percentage set out in sub-clauses (a), (b) and (c) may be allowed. Now, there is a significant difference in the scheme for assessing normal and initial depreciation. The normal depreciation has to be allowed as prescribed whereas initial depreciation has to be allowed according to the percentage set out in the section. In ascertaining whether initial depreciation has to be allowed therefor, any reference to the rules framed under the Act would, in our judgment, be inappropriate, It is true that the assessee has been allowed normal depreciation on the value of the diesel engines. But, we are not called upon to consider in this reference whether the normal depreciation allowed to the assessee is, in the circumstances of the case, justifiable. We have only to consider whether initial depreciation is allowable to the assessee on the value of the diesel engines installed in motor-lorries. The expression 'plant' as defined in section 10(5) includes 'vehicles' purchases for the purpose of business, profession or vocation. Evidently, the assessee has purchased diesel engines for his business and he has installed them in vehicles. Though by the definition of 'plant' vehicles are included, we would not, especially in interpreting a taxing statues, be justified in holding that what is installed in a vehicle which in substance forms part thereof would also be regarded as included in the connotation of that expression. We are, therefore, unable to accept the contention of Mr. S. P. Mehta that, because the diesel engines are installed in the vehicles, initial depreciation is allowable to the assessee in respect of those engines.
3. We are also unable to agree with the alternatives contention of Mr. Mehta that these diesel engines constitute 'machinery being new which has been installed'. In our view, in order that initial depreciation should be allowable on machinery, it must be a self-contained unit capable of being put to use in the business, profession or vocation for the benefit of which it is installed. In the present case, the diesel engines installed by the assessee do not satisfy that test.
4. On the view taken by us, the answer to the question will be in the negative.
5. The assessee to pay the costs of the Commissioner.
6. Question answered in the negative.