1991 (5) TMI 36 - HC - Income Tax

Summary

Issues Involved:
The judgment concerns the assessee's claim for initial depreciation u/s 32(1)(vi) of the Income-tax Act, 1961, in relation to an electric generator installed for business purposes.

Initial Depreciation Claim:
During the assessment year 1976-77, the assessee installed an electric generator for its biscuit manufacturing business and claimed initial depreciation under section 32(1)(vi) of the Act. The claim was rejected by all authorities, leading to the question of whether the initial depreciation was allowable on the generator set installed for power generation for business use. The court held that the machinery or plant must be installed for the business of generation or distribution of electricity or any other form of power to qualify for initial depreciation u/s 32(1)(vi) of the Act. The court emphasized that the business itself must be of power generation or distribution for the claim to be valid.

Interpretation of Statutory Provision:
The court rejected the contention that since the generator was installed for electricity required by the business, it should qualify for depreciation. It emphasized the importance of interpreting statutes to give meaning to every word deliberately included by the Legislature. The court highlighted that the plain meaning of the words in section 32(1)(vi) required the business itself to be of power generation or distribution for the depreciation claim to be accepted.

Conclusion:
The court ruled in favor of the Revenue and against the assessee, stating that the claim for initial depreciation on the generator was rightly declined as the business was not related to power generation or distribution. The reference was answered accordingly, with no order as to costs.