TMI Blog1991 (1) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... eptember 24, 1982, the Inspecting Assistant Commissioner had disallowed the entire claim for investment allowance despite the fact that the appropriate investment allowance reserve had been created and that details of the plant and machinery were filed and were on record. In appeal, the Commissioner of Income-tax (Appeals) in his order dated February 23, 1983, held that the Inspecting Assistant Commissioner was not justified in withholding the investment allowance due to the appellant. The Inspecting Assistant Commissioner, while giving effect to the order of the Commissioner of Income-tax (Appeals), by his order passed under section 143(3)/251 dated January 18, 1985, disallowed the investment allowance on electrical equipment, air-condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Tribunal. Before the Tribunal, counsel for the appellant strongly supported the order of the Commissioner of Income-tax (Appeals) on this issue and urged that all the items constituted plant and machinery necessary in connection with manufacture of paper. He further argued that the tube-well was not an ordinary one. It was a deep-sunk tube-well. Water is essential for the manufacture of tissue paper and, therefore, the tube-well was very much plant used in the course of manufacture. He also argued that the weighing machine is necessary at various stages of production. Therefore, there could be no objection to grant of investment allowance on the tube-well and weighing machines. The Tribunal confirmed the disallowance observing as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 157 ITR) : " 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 permanent employment in his business." Then, the Supreme Court proceeded to hold (p. 96 of 157 of ITR): "In other words, plant would include any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icular subject is an "apparatus", it seems obvious that an enquiry has to be made as to what operation it performs. The functional test is, therefore, essential at any rate as a preliminary.' In other words, the test would be Does the article fulfil the function of a plant in the assessee's trading activity ? Is it a tool of his trade with which he carries on his business ? If the answer is in the affirmative, it will be a plant." Our attention has been drawn to a decision in the case of CIT v. Hindusthan Motors Ltd. [1988] 170 ITR 431 (Cal) to which one of us was a party. There the question was whether a tube-well would fall within the definition of the expression "plant" in section 43(3) of the Income-tax Act, 1961. There, the Divisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustan Motors [1989] 175 ITR 411 (Cal), it must be held that tube-well falls within the meaning of the term "plant". The question that remains to be considered is whether " weighing machine" can be treated as plant. The word "plant" as we have noticed is one of the words used in fiscal legislation of which no statutory definition is provided, so that it is left to the court to interpret it, having regard to the context in which it occurs. Admittedly, it is not a term of art. The natural or dictionary meaning has been extended from case to case as a result whereof the meaning of the word gradually diverges from its natural or dictionary meaning. There is no fixed definition of plant ; nor are there any exhaustive rules for application to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, or for the purpose of the first paragraph of clause (vi), it was also machinery for the purpose of the second paragraph of clause (vi) and clause (via). In our view, tube-wells and weighing machines form part of the plant of the assessee in the production of paper. These are necessary in the various stages of production. It is not necessary that, to constitute plant, the asset should be directly engaged in the manufacture of articles. Having regard to the facts and circumstances of the case, we are of the view that the Tribunal fell in error in holding that the tube-well and weighing machines do not fall within the meaning of plant. For the reasons aforesaid, we answer this question in this reference in the negative and in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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