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Commissioner of Income-tax, Madras Vs. Sri Rama Vilas Service (Private) Ltd., Madras - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case No. 68 of 1958
Judge
Reported inAIR1960Mad224; [1960]38ITR25(Mad)
ActsIndian Income-tax Act - Sections 10(2), 10(5) and 66(1)
AppellantCommissioner of Income-tax, Madras
RespondentSri Rama Vilas Service (Private) Ltd., Madras
Cases ReferredCentral Bombay v. Saraspur Mills Ltd.
Excerpt:
.....of buses and lorries and putting them on road in course of business ; section 10(2)(vi)(a) of the indian income-tax act (xi of 1922) provides for what is called an extra initial depreciation, and that applies to machinery or plant, being new which has been installed after the 31st day of march 1948. section 10(2)(vi)(b) provides for a further relief to the tax-payer and what is called a development rebate has been granted int he case of new machinery or plant installed after the 31st day of march 1954.; the expression 'plant or machinery installed' should be given the same meaning both in section 10(2)(vi)(a) and section 10(2)(vi)(b). where a company purchases buses and lorries and puts them on the road in the course of its business it could be said that the requirement..........and what was called a development rebate has been granted in the case of new machinery or plant installed after 31-3-1954. the word "plant" itself was given a statutory definition in s. 10(5) of the act; "plant" includes vehicles, books, scientific apparatus and surgical equipment purchased for the purpose of the business, profession or vocation.(4) it should be clear that the expression "plant or machinery installed" should be given the same meaning both in s. 10(2)(vi)(a) and s. 10(2)(vi)(b). that the buses and lorries come within the scope of the statutory expression "plant" is not disputed. what the learned counsel for the department urged was that in the case of buses and lorries the further requirement of s. 10(2)(vi)(b), that they should be "installed" before the.....
Judgment:
(1) The question referred to this court under S. 66(1) of the Indian Income-tax Act ran:

"Whether the buses and lorries are plant and machinery "installed" and whether development rebate under S. 10(2)(vi)(b) of the Income-tax Act is allowable on buses and lorries."

(2) That question was answered in favour of the assessee by the Tribunal, and the question of law was referred to this Court at the instance of the department.

(3) Section 10(2)(vi)(a) provides for what is called an extra initial depreciation, and that applies to machinery or plant, being new, which has been installed after the 31st day of March 1948. Section 10(2)(vi)(b) provides for a further relief to the tax-payer, and what was called a development rebate has been granted in the case of new machinery or plant installed after 31-3-1954. The word "plant" itself was given a statutory definition in S. 10(5) of the Act; "Plant" includes vehicles, books, scientific apparatus and surgical equipment purchased for the purpose of the business, profession or vocation.

(4) It should be clear that the expression "plant or machinery installed" should be given the same meaning both in S. 10(2)(vi)(a) and S. 10(2)(vi)(b). That the buses and lorries come within the scope of the statutory expression "plant" is not disputed. What the learned counsel for the department urged was that in the case of buses and lorries the further requirement of S. 10(2)(vi)(b), that they should be "installed" before the development rebate is allowable, has not been satisfied. The word "installed" itself has not been statutorily defined. In view of the extended statutory definition of the word "plant" in S. 10(5) of the Act it seems clear to us that the word "installed" in relation to the machinery or plant, must be construed to mean such installation as that plant is capable of. The Assistant Commissioner referred to the dictionary meaning of the word "installed" as given in Webster's New International English Dictionary "to set up or fix in position for use or service as to install a heating or lighting system.'

The Shorter Oxford Dictionary in English gives as one of the meanings "to place an apparatus, a system of lighting, heating, or the like in position for service or use." Much the same meaning is given in Fun and Wagnalls New Standard Dictionary "to place in position for service or use, as to install hot water system." Putting aside the examples given in the dictionary meaning to explain the scope of the word "installed", "installed" would certainly mean "to place an apparatus in position for service or use". As we said, that a bus, or a lorry is a plant within the meaning of S. 10(2)(vi)(b) cannot and does not admit of any doubt. The only other question is whether, when a bus or a lorry is purchased and is also put on the road in the course of the business that the assesses carried on it could be said that the requirement of installation has been satisfied. That the bus or lorry has been set up for use of service when it is put on the road seems clear to us and in that sense bus or lorries were installed. The statutory test of installation was satisfied by the assessee because such installation as the bus and lorries were capable of was completed.

(5) The learned counsel for the department urged that the requirement of installation with reference to plant and machinery could not possibly be satisfied by a bus or a lorry. Learned counsel could not support an extreme contention, that installation necessarily meant something fixed to earth and thereby becoming immovable. When we pointed out that a mobile van with moveable machinery for carrying out the repairs in the case of a bus operator was a familiar example and any machinery purchased and used for such a mobile unit would be machinery "installed", learned counsel could not challenge that position. That is why we said the word "installed" has to be given its normal meaning and with reference to a given plant or a machinery we have not to see whether such installation as that machinery is capable of has been achieved. That test, in our opinion, was satisfied by the assessee when he put the buses and lorries on the road, that is when his "plant or machinery" was set up for service.

(6) We find that the Bombay High Court has taken a similar view in Commissioner of income-tax Central Bombay v. Saraspur Mills Ltd., . We respectfully agree with the principle of

interpretation laid down by the Bombay High Court in that case.

(7) The question referred to this court is answered in the affirmative and in favour of the assessee. As the department has failed, it will pay the costs of the assessee. Counsel's fee Rs. 250.

(8) Question answered in affirmative.


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