TMI Blog1988 (9) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... iving rise to the, above questions are as follows : The assessee is a partnership-firm carrying on the business of exhibiting films in the cinema building owned by it. For the assessment years 1975-76 and 1976-77, the assessee claimed that the cinema building, furniture and fixtures, etc., should be considered as " plant " for the purposes of depreciation allowance and development rebate. This claim having been rejected by the Income-tax Officer, the assessee filed appeals before the Commissioner of Income-tax (Appeals), who held that the entire cinema building has to be treated as plant, and accordingly directed the allowance of development rebate and depreciation as claimed by the assessee. Aggrieved by the said order, the Revenue filed further appeals before the Tribunal. On a consideration of the matter the Tribunal has held (1) that the entire cinema theatre comprising each and every part of it cannot be considered to be a plant ; (2) that the wooden walls, including false ceiling, wooden panelling, furniture and fixtures in the auditorium and false ceiling of the auditorium would fall within the definition of " plant and (3) the rolling shutters, fountains, mirrors and furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port their respective contentions, some of which have been referred to in the rulings of the Supreme Court. However, in view of the emphasis laid by, learned counsel upon a few decisions which were principally debated before us, a brief reference thereto appears to be necessary, the first of which is IRC v. Barclay, Curle and Co. Ltd. [1970] 76 LTR 62 (HL). The question that arose for consideration was whether a dry dock could be construed as plant for the purposes of the trade of the company within section 279(1) of the English Act. In that case, the dry dock had been made, the walls and bottom of which had to be strong and impervious to water so that large vessels could get into it for the purposes of repairs. In the facts and circumstances of the said case, it was held that the entire dry dock together with the ancillary structures constituted plant. The next case is Schofield v. R and H. Hall Ltd. [1974] 49 TC 558 (CA) concerning silos built in the ship yard. The company carried on trade which consisted of storage of grain. The question was whether the silos is part of the setting in which such trade was carried on. It was found that considering the function of the silos in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context would quite often provide the key to the meaning of the word and the sense it should carry. Its setting would give colour to it and provide a clue to the intention of the Legislature in using it. A word, as said by Holmes, is not a crystal, transparent and unchanged ; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used. " (see Manickam and Co. v. State of Tamil Nadu [1977] 39 STC 12, 17 (SC)). The term " plant " had come up for interpretation in a number of decisions and the courts have evolved what is known as the functional test as against merely the amenities test for determining as to what constitutes " plant ". The classic definition of " plant " as given by Lindley L.J. with reference to the Employers' Liability Act in Yarmouth v. France [1887] 19 QBD 647, 658 (CA), reads as under : "There is no definition of plant in the Act : but, in its ordinary sense, it includes whatever apparatus is used by a businessman for carrying on his business, not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carries on his business ? If the answer is in the affirmative, it will be plant emphasis added) In CIT v. Taj Mahal Hotel [1971] 82 ITR 44, 47, the Supreme Court has observed thus : "Now it is well-settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of every day use. Popular sense means 'that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it '. In the present case, section 10(5) enlarges the definition of the word 'plant' by including in it the words which have already been mentioned before. The very fact that even books have been included shows that the meaning intended to be given to 'plant' is wide. The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation clause declares that they shall include. The word 'include' is also susceptible of other constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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