TMI Blog1985 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer nominated by the latter and to hire out the said cylinders to Apeejay Structurals Ltd. for sale or distribution of Calgas on the terms agreed to by and between the said Apeejay Structurals Ltd. and the assessee which would not be contrary to or inconsistent with the said agreement. The said agreement provided further that during its currency, the assessee and Apeejay Structurals Ltd. would not sell, pledge, pawn or otherwise alienate the cylinders to others without the prior consent of Caltex (India) Ltd. which would retain an option to purchase back the cylinders at the stipulated prices. The assessee was assessed to income-tax for the assessment year 1970-71, the corresponding accounting year ending on March 31, 1970. In the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in allowing development rebate to the assessee on the cylinders. It was urged before the Tribunal that the assessee was not carrying on business of hiring out cylinders and that the rental income from the cylinders should be assessed as income from other sources as held in the case of the assessee in the subsequent assessment years. It was contended that the assessee, in any event, was not entitled to development rebate as the cylinders had not been used in its own business. The distribution of Calgas was the business of Apeejay Structurals Ltd. It was also contended that the cylinders had not been installed in the business of the assessee. The assessee made a submission to the contrary. The Tribunal noted that the Income-tax Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was entitled to claim development rebate on such cylinders was patently erroneous. The learned advocate submitted further that, in any event, the assessee had not been found to own the cylinders and, in fact, the assessee was not the owner of the same and as such the assessee was not entitled to claim development rebate on the cylinders. The learned advocate also submitted that the cylinders were not plants nor had they been installed in the assessee's business. On these grounds also, the claim for development rebate should have been disallowed. The learned advocate for the assessee submitted, on the other hand, that the Tribunal has found and held that the assessee was, in fact, carrying on business in Cylinders. The Revenue had so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 116 ITR 259 (Cal). In this case, a Division Bench of this court, following the decision of the Supreme Court in CIT v. Taj Mahal Hotel [1971] 82 ITR 44, held that capital items like coal tubs, cast iron pipes, winding and guiding ropes, etc., would fall within the ambit of the expression " plant for the purpose of development rebate. (d) CIT v. National Air Products Ltd. [1980] 126 ITR 196 (Delhi). In this case, a Division Bench of the Delhi High Court held that the assessee carrying on business of manufacture of oxygen was entitled to claim depreciation on cylinders used for storing oxygen. Following the decision of the Supreme Court in Taj Mahal Hotel [1971] 82 ITR 44, it was also held that such cylinders would come within the ambit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al against the allowance of depreciation. It has been held that the assessee had been carrying on business of hiring out gas cylinders in the relevant assessment year. This finding is unchallenged. The question sought to be raised by the Revenue that the finding is perverse was not allowed by the Tribunal. The Revenue did not come up before this court under section 256(2) of the Income-tax Act, 1961, to have the said question referred. The contention of the Revenue that the assessee did riot own the said assets also does not bear scrutiny. The agreement dated January 1, 1970, has been noted and considered by the Tribunal. From the order of the Tribunal setting out the material provisions of the agreement, it is quite clear that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing up of a complicated piece of machinery or manufacturing unit for the purpose of production. If that meaning is given, then a number of items would have to be excluded from the expression "plant". With respect, we agree with the view taken by the Allahabad High Court (sic), that if a gas cylinder is brought into use for storing gas, it can be said to be installed in the business. For the reasons as above, we answer the question referred in the affirmative and in favour of the assessee. The learned advocate for the assessee states that the name of the assessee has since been changed to Apeejay Industries (P) Ltd. Let the correct name be brought on record. There will be no order as to costs. MUKUL GOPAL MUKHERJI J.-I agree. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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