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TMI Blog1987 (2) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... d tanks for the State Trading Corporation. The plea was that the well-head tanks were constructed as per the specifications of I.S.I. of storages of crude vegetable oils (Palm Oil). The assessee's claim was that the vegetable oil is a mixture of hydrocarbons and glycerol and contains fatty acids to the tune of 10% and on refinement it is reduced to about 1%. In view of the fact that the vegetable oils contained corrosive chemicals as well as the rate of depreciation would be 30% and not 15%. The assessee further relied upon the fact that it is recognised as a 'Mineral Oil Concern' by the registering authority as well as by the Municipal Corporation referring to the Income-tax Rules III-D (7), he submitted that mineral oil concerns are those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the earth but also all those products, which are above the earth having similar chemical compositions. This is what has been recognised by the Delhi High Court and, therefore, the claim was that, the assessee should be allowed depreciation @ 30% and not at 15% as per the information of the CIT in his order under section 263. 2. The contention of the Department, on the other hand, was that normally the meaning to a term, which is not provided for in the Income-tax Act has to be given the same as is generally understood or as is commonly used. Under the common conception the term 'mineral oil' generally includes only those, which are extracted from below the earth and 'mineral oil concern' as provided in the rules are those, which are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is available to the assessee. 4. The Income-tax Act, 1961 has not provided any definition of the terms, mineral, mineral oil, vegetable, etc, and we have, therefore, to look up the dictionary meaning as is generally understood. The meanings of the various terms as given in Chambers Twentieth Century Dictionary, 1983 edition are given below: Pages Mineral a substance produced by processes of inorganic nature : a substance got by mining : ore : substance neither animal nor vegetable (800) Mineral Oil any oil of mineral origin (800) Inorganic not or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than the carbon compounds except as oxides of carbon or carbonates. As admitted by the assessee, the vegetable oil is a mixture of hydro-carbons and glycerol and, therefore, as per the meanings given above, vegetable oil can not be termed as a mineral oil because mineral oil is an inorganic matter of all substances other than carbon compounds generally admitted a few in the shape of oxides only. It, therefore, appears that vegetable oil could not be termed as mineral oil, since the vegetable oil is extracted from out of plants which plant is organic in nature. Thus, it follows that a concern dealing in vegetable oils could not be termed as mineral oil concern, and therefore, the claim of the assessee that it is entitled to depreciation at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature and that vegetable oil under no; circumstances could be produced by cracking up of petroleun products. We are, therefore, of the view that it has to be held that the assessee is clearly not covered by the term 'Mineral Oil concern' and the action of the CIT u/s 263 is, therefore, proper. On the alternative plea also the claim of the assessee must fail as there is no processing involved and the tank is used for storage purposes only. One of the other alternative plea was that it comes into contact with corrosive chemicals. As per the chemical composition, vegetable oil do contain some fatty acids but this by itself cannot mean that the machinery, i.e. namely, the storage tanks come in contact with corrosive chemicals as is normall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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