TMI Blog1980 (4) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... cylinders were not used but were simply purchased and stored in godowns. Observing that the number of cylinders used in the accounting year was negligible, he disallowed the assessee's claim for depreciation. The total amount of investment by the assessee in the cylinders was Rs. 8,59,562. The assessee preferred an appeal to the AAC. The AAC observed that gas cylinders did not find a mention in any of the heads in the Schedule prescribed under r. 5 of the I.T. Rules. Apart from that, he observed that these cylinders did not form part of plant and machinery but were merely containers or packages returnable by the customers. They did not get worn out easily and, therefore, no particular rate of depreciation could be applied to them. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing depreciation on gas cylinders is correct in law ? We are of opinion that the view taken by the Tribunal is correct. The meaning of " plant " as given in Yarmouth v. France [1887] 19 QBD 647 has been unanimously endorsed by all the subsequent decisions. Lindley L.J. explained that in its ordinary sense the world includes whatever apparatus is used by a businessman for carrying on his business other than the stock-in-trade which he buys or makes for sale and that it includes all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business. It is unnecessary to refer to the English decisions on the subject because the Supreme Court of India has considered the meaning of the word, after ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word " plant " had connection with mechanical or industrial business or manufacture of finished goods from raw products. The extended meaning of the word also, in the opinion of the court, had reference to capital invested in the manufacturing trade or business other than that spent on the raw material or the manufacture of products. In the case before the Bombay High Court, there was no manufacture or industrial business involved while in the present case there is and even the narrow definition applied in that case would satisfy the requirements so far as the present case is concerned. But that apart, it appears to us that the Bombay High Court in the above decision has taken a very narrow view of the meaning of the word "plant" in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at pages 686 and 687. There have also been subsequent decisions, some of which are: CIT v. Kanodia Cold Storage [1975] 100 ITR 155 (All), Nippon Electronics (P.) Ltd. v. CIT [1979] 116 ITR 231 (Kar), CIT v. Swadeshi Mining Manufacturing Co. Ltd. [1979] 116 ITR 259 (Cal), CIT v. Caltex Oil Refining (India) Ltd. [1979] 116 ITR 404 (Bom), CIT v. Warner Hindustan Ltd. [1979] 117 ITR 15 (AP), CIT v. Bank of India Ltd. [1979] 118 ITR 809 (Bom), CIT v. Emco Electro Pvt. Ltd. [1979] 118 ITR 864 (Bom) and CIT v. Kanodia Warehousing Corporation [1980] 121 ITR 996 (All). No useful purpose would be served by discussing these cases at length because each of them turned upon the nature of the particular asset or apparatus which had to be considered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... function of plant in the assessee's trading activity ? Is it the tool of the taxpayer's trade ? It is, then it is plant, no matter that it is not very long-lasting or does not contain working parts such as a machine does and plays a merely passive role in the accomplishment of the trading purpose." Before concluding we may also mention that the Schedule to r. 5 underwent a very elaborate revision in 1969 consequent on the recommendations of the Administrative Reforms Committee and the Boothalingam Committee's recommendations. We find that in the new Schedule which has been introduced in Para. III(F)(4), there is a provision for allowing depreciation on gas cylinders including valves and regulators at 100%. This clearly indicates that gas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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