RAMAN NAYAR J. - The question of law referred to us by the Tribunal is :
'Whether the aforesaid machines are new so as to entitle the assessees to initial and extra depreciations under section 10(2) (vi) and 10(2) (via) of the Indian Income-tax Act ?'
The machines referred to are two Jackstone Junior Frosters supplied to the assessee by the manufacturers and we have the description thereof given by the suppliers themselves at various times. In their invoice they described the machines as 'Reconditioned Jackstone Junior Frosters Mark II'. Later they wrote to the assessee :
'We confirm that the two Jackstone Junior Mark II Frosters which you purchased from us in June, 1954 were completely stripped and reassembled to incorporate the latest modifications and were covered by our twelve months guarantee as in the case of new Frosters.'
In answer to an inquiry by the Income-tax officer they said :
'The two Jackstone Junior Frosters purchased by the above from us in June, 1954 were completely stripped worn parts renewed and the latest modifications incorporated before being shipped to our customers.
It is confirmed that from the time of reassembly to the date of their arrival in Cochin, neither Froster was in use.
We would also add that both Frosters were issued with our twelve months guarantee which normally applies only to new machines.'
To a further enquiry they answered :
'The machines to which you refer had been in use subsequent to first leaving our works but you will appreciate that after they had been returned to our works completely stripped and rebuilt including the replacement of worn parts and the incorporation of the up-to-date modifications they were virtually as new when shipped to the Cochin Company.
It was only because in our opinion the machines were in new condition that they were sold by us with our 12 months guarantee as in the case of new machines.'
Both the Income-tax Officer and the Appellate Assistant Commissioner held that the machines in question were not 'new' within the meaning of that word in sections 10(2) (vi) and 10(2) (via) of the Indian Income-tax Act. But the Tribunal was of the opinion that in the context of the section the word 'new' must be interpreted to mean that which is not old that these reconditioned machines for which the manufacturers were prepared to give a guarantee as for a new machine could not be called old and therefore they must be regarded as new.
We are in complete agreement with the view taken by the Income-tax Officer and the Appellate Assistant Commissioner. It will be noticed from the various statements made by the suppliers themselves, that they were not prepared to call the machines new machines. In fact what they said implied the contrary. The machines were virtually as new. In their opinion the machines were in new condition. They gave a grange as in the case of new machines. This was as far as they would go and we should think that if the suppliers had sold these reconditioned machines as new machines, the assessee would have been the first person to complain. We are not saying that because the suppliers did not call the machines new machines they cannot be new within the meaning of the statute but the statements of the suppliers are certainly some indication of what is understood by the word ' new' with reference to machines in the ordinary sense in which that word is used. The word 'new' is not defined in the Act and therefore, the meaning to be given to it is what a reasonable man who knows the English language - which we might say is the mother tongue of the suppliers - would understand by the word in the context in which it is used namely as applied to a machine. It is true that the word 'new' has different meanings but when used with reference to a machine its meaning is we should think, 'new-made, or brought into existence for the first time' which is one of the meanings given in the Shorter Oxford Dictionary. We do not discover the meaning of the word 'new' by trying to find out what is meant by the word 'old'. Nor is it of any assistance to say that the word is relative and that in relation to something older a new thing like the New Testament might itself be centuries old. As pointed out by the Appellate Assistant Commissioner 'new' as used in the section cannot mean 'new to the assessee'. The machines themselves must be new machines and if it were necessary to find out what is the opposite of a new machine we would say that with reference to a machine the word 'new' stands in antithesis to the word 'used'. The information furnished by the suppliers leaves no room for doubt that the machines were used after they were first made. Subsequently, the machines were taken into parts and were reassembled after replacing worn out parts and after incorporating the latest modifications. It is not as if the old machines were used only as raw material out of which entirely different machines were fashioned. Despite the dismantling and the reassembly after renewal of worn out parts and the incorporation of modifications the machines retained their identity and we think it would be doing violence to the language to call them new machines. They may be as good as new. The manufacturers might have had so much confidence in their proper working as to furnish a guarantee which they normally furnish only for new machines. Yet they are not new and are at best only reconditioned machines. As we have said before the manufacturers know the ordinary meaning of the word 'new' with reference to machines and noting is clearer from the correspondence than that they refused to call these machines new machines. We also refuse to call them new machines.
Our answer to the question asked is in the negative. The Registrar will take action under section 66(5) of the Act.
We make no order as to costs.
Question answered in the negative.