TMI Blog1959 (11) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee were rejected as unreliable, and the gross income of the assessee had to be estimated under the proviso to section 13 of the Act in each of the three assessment years The Assistant Commissioner and the Tribunal rightly overruled the view of the Income-tax Officer, that under such circumstances nothing was allowable as deduction, though the assessee had expended the amounts in question to meet the interest charges But how much of the loans was borrowed for the transport business of the assessee, he had to prove, and while no accounts were produced for the third year, the books produced for the first two years were rejected as unreliable The Tribunal had, therefore, necessarily to estimate how much of the payments represented interest on loans borrowed and utilised for the transport business of the assessee It was for the assessee to prove that each of the loans on the which he paid interests in the years in question was utilised for his business, and that burden the assessee did not discharge There is really no material on record to sustain any possible contention that the estimates ultimately upheld by the Tribunal were unreasonable We have to answer the first que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with reference to each of the three statutory provisions we have now to consider, paragraphs (1) and (2) of section 10(2)(vi) and section 10(2)(via) If the diesel engine was machinery for the normal depreciation for which the first paragraph of section 10(2)(vi) provided, it should continue to be machinery also for the additional allowance for depreciation under the second paragraph of section 10(2)(vi) and section 10(2)(via) In the absence of a statutory definition the normal meaning of the word machinery has to be accorded to it In Corporation of Calcutta Vs Chairman, Cossipore and Chitpore Municipality, their Lordships of the Privy Council stated at page 201 : Their Lordships concur with Lord Davey in thinking that there is great danger in attempting to give a definition of the word machinery which will be applicable in all cases It may be impossible to succeed in such an attempt If their Lordships were obliged to run the hazard of the attempt, they would be inclined to say that the word machinery contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and inter dependent operation of their r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsider in RC No 68 of 1958 Commissioner of Income-tax Vs Sri Rama Vilas (Private) Ltd, the scope of the statutory requirement of installed, and judged by that term we have to hold that the diesel engines were installed when they were fitted to the buses to run them Of the reasons given by the Tribunal for disallowing the claim for the additional depreciation only one requires consideration The others were really irrelevant, for example, that the assessee did not show in his books the sale price of the old engines, or that he did not show that anything was wrong with the old petrol driven engines While it was not necessary that the assessee should prove that the installation of diesel engines improved immediately the profit earning capacity of the buses, even that was satisfied in this case The Tribunal stated : In our opinion the assessee is not entitled to extra depreciation u/s 10(2)(vi) or 10(2)(via) because, however important the engine might be for the running of a motor-car, it is after all part of an equipment and it cannot by itself become machinery for the purpose of claiming extra depreciation as envisaged in those two sub-sections Virtually the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory provisions, section 10(2)(vi) and 10(2)(via) of the Act That justifies the adoption of the test formulated by the learned Judges of the Bombay High Court in Maneklal Vallabhdas Parekh Vs Commissioner of Income-tax, that the machinery must be a self-contained unit Does an electric motor which provides power cease to be machinery because it is part of an industrial plant, and except to provide owner for that plant the electric motor would be needless for the business of the assessee ? All that the statute [section 10(2)(vi) and 10(2)(via)] requires is that it must be new machinery, and that that machinery must be used in the business of the assessee If integration with other pieces of machinery All of which together may constitute an industrial or manufacturing plant, does not divest that item of machinery of its character of machinery, we fail to see why any difference should be made when the integration of the machinery is with a motor bus, which as a vehicle is a plant for the purpose of section 10(2)(vi) and 10(2)(via) It must be remembered that it is an inclusive definition of plant that has been given in section 10(5) of the Act We can see no basis, statutory or otherwise, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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