TMI Blog1978 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 1916. The design criteria and construction practices adopted were those then in vogue. The design did not allow for any uplift pressure as is the present practice. The dams were constructed as a mass and coarse rubble masonry structure with lime surki mortar. No cement was used at all. Naturally, after years of weathering, the dams could not be considered as impervious or as stable as the present day dams. It was, therefore, considered absolutely essential to strengthen the dams by the Coyne method which involves anchoring high tension steel into the bedrock of the dams, which is subsequently tensioned and grouted. Before anchoring the dams to the bedrock foundations under the Coyne method, however, it was necessary to carry out extensive grouting over the full length of the dams to make them stable and monolithic, thereby conforming to present day design criteria and accepted construction practice. The inside structure of the dams of coarse rubble and surkilime mortar had to be consolidated and made waterproof to protect the high tensile steel cables used for anchoring the dams from corrosion. It was the case of the assessee that a considerable expenditure now incurred on the dams ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same and making the same waterproof and carrying on the work of cement grouting should be taken as additions to the existing dams and development rebate should be allowed on the expenditure incurred by the assessee. On the other hand, it was contended, on behalf of the revenue, that having regard to the provisions of s. 33 of the I.T. Act, 1961, in order to claim development rebate, the plant and machinery must be a new one and should be used as a self-contained unit and the fact that under certain conditions, the addition may be regarded as self-contained for the purposes of any business in which it was used is irrelevant in considering its admissibility for development rebate. It was also urged on behalf of the revenue that it could not be said that the plant or machinery was installed as only the old dams were constructed or strengthened by incurring the expenditure and it cannot be said that after the expenditure new dams came into existence. It was also urged that even if the dam is regarded as plant or machinery, it was not new and reliance was placed upon the meaning, given in the Oxford Dictionary, of the word " new " as " not existing before ", " now first made ", or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the word " new " and stated that nothing can be said to be new unless it was not, existing before, or newly made or brought into existence for the first time. In short, his submission was that since the old dams existed right from the year in which they were constructed, by incuring the expenditure for strengthening the same by the modern scientific method no new dam is constructed or installed and as no plant is installed within the meaning of s. 33 of the Act, the assessee would not be entitled to development rebate in respect of the amount spent by it for such strengthening of the dams. That the expenditure that has been incurred in the two years in respect of the two dams is for strengthening the said two dams is quite evident from the very maps that have been produced by the assessee, because both the maps clearly show that the drawings are for the proposed strengthening of Walawhan Dam and Shirawata Dam. Thus, his submission that the conditions laid down in s. 33 of the Act were not fulfilled and the assessee was rightly denied the claim for development rebate by the taxing authorities. He urged that the Tribunal did not approach the problem having regard to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the dam. A reinforced cement concrete cap, about two feet in diameter and about two feet high, is similarly formed and fixed on the top of the cable, leaving a space of about 1 1/2 feet between the surface of the dam and the bottom of this cap. Next, the cable is jacked up by hydraulic jacks at a pressure of about 220 tons. After the cable is fully tensioned, three permanent packers (concrete cylinders) are placed rightly between the pit surface of the dam and bottom of the RCC cap. Liquid cement is also forced into the angular space between the cable and the side of the hole to protect the cable against corrosion. Thus, this huge steel and concrete clamp anchors the dam to the bedrock, i.e., the clamp holds the dam pressed and fastened to the bedrock and prevents it from being uplifted by the pressure of water seepage under its base. Such clamps are placed at distances of between 4 feet and 10 feet over the entire length of the dam. Since the dam is constructed in a valley, the height of the dam varies at different places, and the distance between two clamps varies, depending upon the height of the dam at the particular place. The same Coyne method explained above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic, the Gujarat High Court in CIT v. Elecon Engineering Co. Ltd. [1974] 96 ITR 672, held that the drawings and patterns, which constitute know-how and are fundamental to the assessee's manufacturing business, are " plants ". It is also well settled in view of the judicial decisions that neither the word " plant " nor the word " machinery " is confined to a self-contained unit-plant includes part of a plant, e.g., the engine of a vehicle ; machinery includes part of a machinery, and building includes part of a building. It should not be overlooked that Walawhan Dam and Shirawata Dam were constructed in the years 1911 and 1916. At that time, the modern technique for construction of dams was not so much advanced. In the two years, with which we are concerned, lakhs of rupees have been spent in anchoring Walawhan Dam and Shirawata Dam. It is undoubtedly true that by incurring this expenditure no independent asset has come into existence but in order to entitle an assessee to claim development rebate creation of an independent asset is not essential. If by incurring this expenditure the existing dams have been so strengthened as to prolong their lives for a sufficiently long duration, ..... 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