TMI Blog1993 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... close nexus with the business of construction, manufacture or production of any article or thing not being an article or thing specified in Schedule XI. In that case, the question of granting investment allowance on fire extinguishers and time-office equipment came up for consideration and the High Court held that they were not inextricably connected with the production of any article or thing and therefore, they were not plant and machinery installed for the purpose of business of construction, manufacture or production of any article or thing. Consequently, investment allowance was held to be not entitled to these equipments. In that case the question of grant of investment allowance on electrification machinery was remanded to the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l [1971] 82 ITR 44 was relied upon for coming to this conclusion. Reliance was also placed on the judgment of the Gujarat High Court in the case of CIT v. Tarun Commercial Mills Ltd. [1985] 151 ITR 75 wherein the word " plant " was held to include apparatus or instruments used by a businessman in carrying on his business. Applying the functional test, it was held that air-conditioners or electric fans are instruments which would advance the performance of business of the assessee and therefore, they were entitled to be included within the term " plant ". The Gujarat High Court held that though office premises are no doubt part of the premises where business is carried on, but the fixtures like air-conditioners or fans cannot be considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Gujarat High Court in the case of Tarun Commercial Mills Ltd. In fact, their Lordships went one step further and observed that air-conditioners and electric fans installed in the office premises are plant entitled to depreciation and development rebate and they did not become office appliances just because they were fixed in office premises, so to say. For coming to this conclusion, their Lordships have applied three types of functional tests normally visualised in this regard, namely, (i) common or popular parlance test. (ii) the principal and primary use for which they are capable of being used, and (iii) commercial test, viz., how the articles or goods are known in the world of " trade and commerce ". The Bombay High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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