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Interpretation of the term "installed" under section 10(2)(vib) of the Income-tax Act for claiming development rebate on buses and lorries. Analysis: The case involved a dispute regarding the eligibility of a private limited company, engaged in the transport business, to claim a development rebate under section 10(2)(vib) of the Income-tax Act for the purchase of new buses and lorries in the assessment year 1955-56. The Income-tax Officer disallowed the claim, stating that vehicles like buses and motor cars do not qualify for the rebate as they are not considered plant and machinery. However, the Appellate Assistant Commissioner and the Tribunal had differing interpretations regarding the term "installed" concerning the eligibility for the rebate. The Appellate Assistant Commissioner took a strict interpretation of the term "installed," emphasizing the need for fixing up of the apparatus or machinery, which, according to him, was not applicable to buses. On the other hand, the Tribunal accepted the assessee's interpretation, stating that the buses and lorries were indeed "installed" within the meaning of the statute. The key contention revolved around whether the buses and lorries met the requirement of being "installed" to qualify for the development rebate. The High Court analyzed the statutory provisions under section 10(2)(via) and section 10(2)(vib) concerning initial depreciation and development rebate, respectively. It noted that the word "plant" had a statutory definition under section 10(5) of the Act, which included vehicles purchased for business purposes. The court emphasized that the term "installed" should be interpreted consistently across both sections. The court referred to dictionary meanings of "installed" to determine its scope, concluding that placing an apparatus in a position for service or use constituted installation. The court rejected the Department's argument that installation required something fixed to earth, highlighting examples such as mobile vans with moveable machinery as instances of machinery being "installed." It held that when the buses and lorries were put on the road for business use, they satisfied the requirement of installation as they were set up for service. The court also cited a similar view taken by the Bombay High Court in a previous case, endorsing the interpretation laid down by them. In conclusion, the High Court answered the question in favor of the assessee, stating that the buses and lorries qualified as "installed" plant and machinery for claiming the development rebate under section 10(2)(vib). The Department was directed to pay the costs of the assessee, including counsel's fee. The judgment provided a comprehensive analysis of the term "installed" in the context of claiming development rebate on buses and lorries, aligning with the assessee's interpretation and rejecting the Department's contentions.
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