TMI Blog1993 (8) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of investment allowance claimed by the assessee on plant and machineries stated to have been installed by it in these two years in its Industrial Alcohol Section. The assessee mainly carries on the business of manufacturing India-made foreign liquor like whisky and rum etc., which are branded as potable alcoholic spirits. The assessee, however, has tried to explain the working of its factory as it firstly converts molasses into spirits. It is stated that the said spirit is thereafter converted into rectified spirit (alcohol) and some portion remains as residue which is of the nature of denatured spirit. It has been stated that this rectified spirit forms the main basis for making of both potable alcoholic spirits as well as industrial alcohol (non-potable), which is used in chemical industry as well as plastic industry. It was also admitted by the representative of the assessee during the course of the hearing of the appeals before us that the rectified spirit produced by the assessee-company is actually utilised by it for manufacture of both alcoholic spirits as well as industrial alcohol. The assessee claims that during both these years under consideration, certain pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed representative of the assessee drew our attention to the relevant paragraph of the said speech (page 66 of 107 ITR (Statutes), an extract from which is as below : "Since there is a need for encouraging generation of internal resources for financing investment, I consider it best to extend the scope of investment allowance to all industries except those which are engaged in the manufacture of specified low priority items such as cigarettes, cosmetics and alcoholic beverages." He, therefore, argued that the items included in the Eleventh Schedule were only low priority items and so far as the first item relating to alcoholic products are concerned, it was the intention of the Legislature to consider only alcoholic beverages and not alcohol used for other, viz. industrial purposes, as prohibited items. The said representative of the assessee also relied on the decision of the Bombay High Court in the case of CIT v. Caltex (India) Ltd. [1989] 177 ITR 239 to show that even so far as item (3) of Schedule V/Schedule VI relating to allowability of deduction under section 80E/80-1 was concerned, a narrow meaning was given to the expression " mineral oil " in connecting similar word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that the expression is proceeded by two words viz., " beer " and " wine " each of which is of the nature of alcoholic beverage. At the same time again, since beer and wine are not manufactured by distillation process, in the strict technical sense, they cannot be considered as " spirit ". We feel that for the purpose of getting to the real meaning of the expression " alcoholic spirit ", it will be necessary for us to take recourse to the principles of noscitur a socits or the principles of ejusdem generis. As is stated in Maxwell on the ' Interpretation of Statutes ', the rule of noscitur a sociis is as below : " Where two or more words which are susceptible of analogous meaning are coupled together, noscitur a sociis, they are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general." 7. The words " ejusdem generis " means " of the same kind or nature ". This rule is that where particular words are followed by general words, the general words should not be construed in their widest sense but should be held as applying to objects, perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule and that the said meaning should be restricted to alcoholic beverages or potable alcohol only. The corollary to this inference would be that industrial alcohol would remain beyond the domain of the Eleventh Schedule and hence, any plant and machinery installed for the exclusive purpose of producing industrial alcohol will be entitled to the investment allowance under section 32A. 8. Although this solves the legal dispute as to whether industrial alcohol should be considered as prohibitive item or not, in the instant case, however, the departmental representative has raised the issue that neither from the books of account nor from any other materials supplied by the assessee in the present case, it is possible to make a clear distinction between plant and machineries used by the assessee for manufacturing rectified spirit, potable alcohol like rum and whisky and industrial alcohol. It is an admitted fact that the rectified spirit produced by the assessee is utilised for manufacture of potable alcohol also, although some portion of the rectified spirit goes towards manufacture of industrial alcohol. Hence, plant and machineries installed for manufacture of rectified spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound. 9.1 The main ground relating to the disallowance under section 43B is, however, that the sales-tax collected towards the end of the accounting year was actually paid during the next year within the due dates for payment of the same in accordance with the laws relating to sales-tax. This facility is provided by the first proviso to section 43B as introduced by the Finance Act, 1987 with effect from 1-4-1988. It has been decided by the Karnataka High Court in the case of Chief Commissioner (Admn.) v. Sonjay Sales Syndicate [1992] 197 ITR 255 that this proviso has got to be considered as merely declaratory in nature and hence, would be applicable in retrospective manner also. By respectfully following the said decision of the Karnataka High Court, therefore, we direct the Assessing Officer, in this case, to find out whether and to what extent the amount disallowed by him under section 43B fulfills the condition as laid down in the first proviso to that section. The assessee shall get reduction out of the disallowance to the corresponding extent. The Assessing Officer is directed to grant such benefit to the assessee. 10. In the result, both the appeals are partially allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
