TMI Blog1997 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis that it manufactures articles or things falling under item No. 8 of Ninth Schedule which reads 'industrial and agricultural machinery'? 2. Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the subsidy received from SIPCOT by the assessee does not go to reduce the cost of the assets under section 43(1) of the Act for the purpose of depreciation?" In so far as the second of the abovesaid two questions is concerned, it is agreed by both the rival counsel that the said question is covered in favour of the assessee by the decision in CIT v. P. J. Chemicals Ltd. [1994] 210 ITR 830 (SC) and accordingly we answer the said second question in the affirmative and in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial machinery' under the Income-tax Act, a reference to the Industries (Development and Regulation) Act could not be irrelevant. Textile machinery appears in the First Schedule to that Act under the broad heading 'industrial machinery'. It is listed as 'textile machinery (such as spinning frames, carding machines, power looms and the likes including textile accessories)'. Now even the assessing authority does not dispute that these are accessories, but he says that paper cones and tubes delicate and inexpensive as they are, could not be treated as industrial machinery is such. He would perhaps grant the allowance only if an entire production unit is manufactured and not otherwise. We do not think that such a rigid interpretation is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation of Calcutta v. Chairman of Cossipore and Chitpore Municipality, AIR 1922 PC 27, and holds that leaf springs used in the manufacture of trucks and other motor vehicles are not industrial machinery within the meaning of item No. 8 of the abovesaid Ninth Schedule and that initial depreciation under section 32(1)(vi) of the Act cannot be allowed in the case of machinery employed for the manufacture of the said leaf springs. On the other hand, learned counsel for the assessee reiterates the abovesaid reasoning of the Tribunal. He also points out that in the abovesaid item No. 8 of the First Schedule to the Industries (Development and Regulation) Act, 1951, under the abovesaid heading "A. Major items of specialised equipment used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... description of industrial machinery spoken to in item No. 4 of the abovesaid Fifth Schedule cannot be imported at all. The very fact that the Legislature has chosen to use the expression "industrial machinery" in one way in one Schedule and in another way in another Schedule, shows that the Legislature itself intended to give different meanings to the same term in the said two Schedules. If really, the Legislature wanted to have the same meaning in both the Schedules, it would have accordingly worded the said expression in the same way in both the Schedules. Therefore, it is clear to us that the Tribunal and the first appellate authority erred in proceeding on the footing that the meaning of the term "industrial machinery" used in item No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'machinery'." Thus, the Supreme Court has also adopted the abovesaid definition given by the Privy Council. Further, in India Leaf Spring Manufacturing Co. (P) Ltd. v. CIT [1989] 175 ITR 639 also, the Andhra Pradesh High Court has given the same meaning to the term "machinery" and held that leaf springs used in the manufacture of trucks and other motor vehicles do not constitute "industrial machinery" within the meaning of the abovesaid item No. 8 of the Ninth Schedule to the Act and hence the machinery employed for manufacturing the said leaf springs is entitled to initial depreciation provided by section 32(1)(vi) of the Act. The relevant observation in the said decision is as follows : "The Tribunal has held that the 'leaf springs' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and cones, it is not difficult to hold that they are not industrial machinery, coming under the abovesaid item No. 8 of the Ninth Schedule. They cannot also be taken as mechanical contrivances which by themselves or in combination with one or more other mechanical contrivances, generate power or evoke, modify, apply or direct natural forces, even assuming that they are necessary or essential in running the textile machinery. We may also incidentally mention that the Tribunal has also noted that they have a short life and cost less (little less than Rs. 2 per unit). The decision relied on by learned counsel for the assessee in CIT v. Chitram and Co. Pvt. Ltd. [1991] 191 ITR 96 (Mad) has no application at all to the present case. It is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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