TMI Blog2015 (3) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... le considering the meaning of the word 'business', it is not necessary that there should be a direct nexus between the machinery and the activity that is carried on. Any transaction in connection with or incidental or ancillary to such trade, commerce, manufacture adventure or concern, is sufficient to bring it within the word 'business' and therefore, when Air conditioner is used by the assessee in the course of his business, it falls within the definition of 'capital goods'. In view of Section 12 of the Act, the assessee is entitled to benefit of input tax rebate. For the very same reasons, the security systems for building where business is carried on is also eligible for tax rebate. In that view of the matter, the order of the Tribunal to that extent requires to be interfered with and accordingly, the said findings are set aside. - assessee is entitled to input tax rebate in respect of work stations as they do not fall under the definition of 'wood furniture'. - assessee is entitled to the benefit of input tax rebate on xerox machines, air conditioners and security systems for building - Decided in favour of assessee. - STRP No. 18/2010 & STRP N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of April with regard to mobile phones and chairs. Aggrieved by the said order, an appeal was preferred to the Joint Commissioner of Commercial Taxes. The Joint Commissioner of Commercial Taxes, granted the benefit of input tax on credit in respect of 16 goods set out at para 13 of its order. However, he did not grant the said benefit in respect of Xerox machines, office stationery, air conditioners, building materials, security systems for building, work stations and works contract tax on AMC. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. The Tribunal partly allowed the appeal by allowing the claim of input credit rebate on purchase of work stations and confirmed the orders of the authorities below insofar as the input credit rebate of Xerox machines, office purchases, stationery, air conditioners, building materials, security systems for building. It is against this order, the assessee has preferred the appeal. In fact, the revenue has also preferred an appeal challenging the basis for allowing the input tax rebate on work stations. 3. The learned counsel for the assessee assailing the impugned order, contended that though Section 11 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencement of commercial production, or sale of taxable goods or sale of any goods in the course of export out of the territory of the India by the registered dealer and shall be apportioned over a specified period, as may be prescribed. 7. Capital goods for the purpose of Section 12 means a plant, including cold storage and similar plant, machinery, goods vehicles, equipments, moulds, tools and jigs, and used in the course of business other than for sale. If the input tax is paid in purchasing the aforesaid capital goods, the assessee is entitled to the input tax rebate. In fact, this Court had the occasion to deal with the scope of Section 12 in the case of Suma Oil Agencies, Nagavara Main Road, Bangalore Vs. the additional Commissioner of commercial Taxes, Zone-II, Bangalore reported in 2014 (79) KLR 153 where it has been held as under: 13. Section 12 speaks about deduction of input tax in respect of capital goods which is used in the business of sale of any goods in the course of export out of the territory of India and in the case of any other dealer in respect of purchase of capital goods wholly or partly for use in business of taxable goods. Rule 133 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achine is a machine which falls within the definition of 'machine'. 9. Insofar as air conditions are concerned, it is also machinery which is used to keep the temperature of a manufacturing process at a particular temperature. Therefore, it is a machinery used in the course of the business of the assessee and it is also eligible for input tax rebate. Similarly, the security systems for buildings are also machinery installed in the premises of the business for production of the manufacturing and therefore, the finding recorded by the Tribunal that the development software in the computer system is the main activity and after the development it is subsequent act of copying for which Xerox machine is used. The computer itself generates software data which in turn is transferred. It is only after taking out copies, the Xerox machine is utilized and it is not different from the main activity of the assessee that is development of software in computer system, is quite unacceptable. From the very description, it is clear that to constitute 'capital goods' what is required is that such machinery should be used in the course of business and the word 'business' is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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