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1963 (2) TMI 69

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..... ugment its gains. The Income-tax Officer as also on appeal the Appellate Assistant Commissioner found the amount expended by the assessee on replacement of old bodies on its vehicles by new bodies as representing capital expenditure and this has not been a matter of controversy between the parties. The claim was disallowed by the Income-tax Officer but the Appellate Assistant Commissioner allowed it as initial depreciation item under the said provision. On a further appeal by the respondent, the Income-tax Appellate Tribunal, Delhi Bench B, has reversed the appellate order restoring that of the Income-tax Officer holding that the body of a bus is neither a machinery by itself nor is it a plant within the meaning and scope of section 10(2)(v .....

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..... an old body by a new body of a vehicle but replacement of a petrol engine by a diesel engine. The first case is Maneklal Vallabhdas Parekh v. Commissioner of Income-tax [1959] 37 ITR 142. In that case on behalf of the assessee initial depreciation was claimed under clause (vi) both on the ground that the new diesel engine that replaced the old petrol engine in the vehicle was within the expression "plant" as also "machinery" as used in paragraph 2 of clause (vi ), it having been stated in the arguments that "vehicles" are particularly included in the expression "plant" by sub-section (5) of section 10. The learned judges observed: "Though by the definition of 'plant' vehicles are include .....

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..... does not cease to be machinery merely because it has to be used in conjunction with one or more machines, nor merely because it is installed as part of a manufacturing or industrial plant. They were of the opinion that a diesel engine, replacing a petrol engine in a vehicle, was by itself "machinery" within the meaning of section 10(2)(vi) and continued to be machinery even after it was made an integral part of the assessee's bus. This case has been followed in Mrs. George Mathew v. Commissioner of Income-tax [1961] 43 ITR 535 , the learned judges in this case also not accepting the view of the Bombay High Court as to the scope of the expression "machinery". These last two cases are confined only to the consideration .....

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..... section (2) of section 10, for the present purpose, refers to "plant being new", and it is clear that a plant that is partly new and partly not new is not within the scope of these words. Again sub-section (5) of section 10 defines "plant" to include vehicles, and here again the intention does not appear to be to include part of a vehicle such as the body of a vehicle in that definition. The learned counsel for the assessee then presses that the substantial part of the vehicle so far as the assessee is concerned is the body of the vehicle which provides seating capacity for the passengers and for this reason a body of a vehicle should be considered within the scope of the definition of the expression "plant", b .....

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