TMI Blog1984 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ce claimed thereon was Rs. 8,17,436. There is no dispute that the necessary reserve has been created. However, the ITO was of the opinion that the assessee will not be eligible for investment allowance as the assessee is manufacturing enamels and varnishes which fall under the Eleventh Schedule of the Income-tax Act, 1961 ('the Act'). The Commissioner (Appeals) agreed to with him. He held that the expression enamel, varnish, etc., appearing in item 26 in the Eleventh Schedule should be understood in the same way as understood by a common man. There would be no justification, according to him, for import a different meaning depending upon the user of such material. He pointed out that when the Act does not provide any guidelines for determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out that all the products mentioned is not for the domestic use. Paints and enamels are also used for the industrial purposes, but on that ground it could not make any difference. He referred to the submissions that the varnish manufactured by the assessee is impregnating varnish and submitted that it would make no difference in the interpretation of the item in the Schedule. He pointed out that lacquer is also impregnating. Varnish also gets absorbed into the wood. He, therefore, submitted that no interference is called for in the Commissioner (Appeals)'s order. 12. We have considered the submissions. Under section 32A of the Act an assessee would be entitled to investment allowance in respect of machineries installed, the conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sceptible 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. Maxwell in The Interpretation of Statutes, Twelfth edition, has pointed out this principle at page 289. It has been pointed out at page 292 that the House of Lords had used this principle in the taxation case in IRC v. Frere 1965 AC 402. Therein the word 'interest' in the phrase 'interest, annuities or other annual payments' in the English Income-tax Act, 1852, was held to mean annual interest. 14. Applying this principle, we are of opinion that each of the items f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only such type of varnishes (out of many types mentioned in para 14), which will be analogous with the rest of the words, i.e., which will be analogous with pigments, colours and paints. Herein comes the requirement to which the varnish is put. We have mentioned that the varnish manufactured by the assessee can be used neither as a protection nor as a decoration. Its use is to increase the efficiency of the coils in motors, armatures, etc. Many of these coils when put to use rotate at a high speed. During such rotation, coils tend to fly away due to centrifugal force. The varnish gives them a cohesiveness and binds them together. In such machine it is highly essential that there is no gap between the coils. This is also ensured by the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is not used for the purpose other than the electrical goods. We find that practically the entire sales inland is to companies manufacturing electrical goods. These are also exported to USSR. But we understand the use to which it is put. In fact the products of Dr. Beck are associated in the market only with electrical installations. 17. Apart from that, we should also point out that in the definition of 'varnish' attempted by the Madhya Pradesh High Court in the case of Akhtar Abbas, one of the ingredients is the use to which it is put. To quote : "It would appear from the meaning of the word that it is a generic name given to a homogeneous solution of gums or resins in alcohol, linseed oil or the like which is coated on variou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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