TMI Blog1999 (6) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... e and fittings ?" The assessee-company manufactures pharmaceuticals. In the assessment year 1976-77, the assessee claimed depreciation at the rate of 100 per cent. under section 32(1)(ii) of the Income-tax Act, 1961 ("the Act"), on the amount of Rs. 2,42,084 spent on light fittings, fluorescent fittings, strip light fittings, frames for light fixtures, installations/wiring for lighting, installation of call bell, indicators/buzzers/door locks, etc., on the ground that it amounted to addition to plant and machinery and the cost of each one of the additions did not exceed Rs. 750. The Income-tax Officer did not accept the above contention of the assessee as he was of the opinion that none of the items mentioned above could be regarded as pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation at the rate of 100 per cent under section 32(1)(ii) of the Act. The Tribunal, therefore, allowed the appeal of the assessee. Hence, this reference at the instance of the Revenue. We have heard Mr. R. V. Desai, learned counsel for the Revenue. We have also heard Mr. J. Jain, learned counsel for the assessee. Section 32(1)(ii) of the Act, as it stood at the material time, so far as relevant, reads as follows : "32. Depreciation.---(1) In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed---. . . (ii) in the case of buildings, machinery, plant or furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is whether the fittings of various description including light fittings are "fittings" within the meaning of item II of Part I of Appendix I which deals with rate of depreciation on "furniture and fittings" or "plant" referred to in the first proviso to section 32(1)(ii) of the Act. We have given our careful consideration to the above controversy. "Plant" as such has not been defined in the Act. Section 43(3) of the Act merely contains an inclusive definition which says that plant shall include ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession. Obviously it is an inclusive definition. Its intention is to enlarge the meaning of the expression "plant" occurring in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apparatus installed in the shop premises did not qualify as "plant" but formed part of the "setting". While saying so it was observed that in deciding whether the expenditure on a particular item is allowable as expenditure on plant, the question which the court must ask itself is whether the particular subject-matter under consideration either itself performs, or is a necessary or integral part of that which performs, simply and solely the function of "housing" the business, or whether, as its sole function or as its additional function, it performs some other distinct business purpose. A distinction was drawn between "plant" and "setting" and on the facts of the case, it was held that the lighting and other apparatus installed in the shop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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