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TMI Blog1986 (10) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing his decision for the immediately preceding year, allowed the assessee's claim that these amounts should not be treated as perquisites for the purpose of computing the amount disallowable under that section. It is now agreed before us that as far as the personal accident insurance premia of Rs. 550 is concerned, the issue is governed by the decision of the Karnataka High Court in the case of CIT v. Amco Batteries Ltd. [1984] 150 ITR 48. Similarly, in the case of club subscriptions of Rs. 1,080, the Tribunal had occasion to consider similar matter in the case of State Bank of India v. IAC [1985] 13 ITD 550 (Cal.) in which it was held that club subscription does not constitute a perquisite because the employees are directed by the bank to become members of the club in the interest of the bank. Facts being similar here, the decision of the State Bank of India applies in this case also. Hence, we uphold the order of the Commissioner (Appeals) in respect of the payment of Rs. 550 and Rs. 1,080 being personal accident insurance premia and club subscriptions. As regards other two payments of Rs. 3,826 towards electricity charges and Rs. 2,790 towards salary paid to servants, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im for investment allowance on the machinery leased out by it. 4. It is next contended that the Commissioner (Appeals) is not correct in holding that the assessee will be entitled to depreciation at the rate of 100 per cent in respect of bottles purchased and leased out by it to outsiders by treating the bottles as 'plant'. During the year relevant to the assessment year 1981-82, the assessee purchased bottles worth Rs. 44,80,245 and claimed the entire cost of the bottles as deduction under the first proviso to section 32(1)(ii) of the Act on the ground that each bottle is a 'plant' and as the cost of each bottle is less than Rs. 750, it is entitled to full deduction in respect of the entire cost of all bottles. The assessee during the year purchased bottles and leased them out in bulk to Spencers Co. as containers for soft drinks, beverages, etc. While it is conceded that all the purchases are made in bulk, where the cost of each purchase may be in thousands or even in lakhs, still it is contended that each bottle would constitute a separate plant and as the cost of each bottle comes to Rs. 1.61, which is less than Rs. 750, the assessee is entitled to deduction of the entire a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d clauses like clause 12 according, to which the lessee shall bear the entire risk of loss and damage to the equipment from any cause whatsoever. In the event of loss or damage the lessee shall at the option of the lessor replace the equipment which in the opinion of the lessor is comparable and in good repair and condition and working order and such equipment shall for all purposes be the property of the lessor. The lessee is also supposed to insure the equipment leased out and if any sum is received from the insurance claims, it is to be applied for the lessee's obligation for replacement of equipment. Thus, it is stated that there is no loss suffered by the assessee either by wear and tear or by way of breakages and so the assessee will not be entitled to any deduction under section 32(1)(ii) or the proviso thereunder. He also relies on the decision of the Madras High Court in the case of CIT v. Tamil Murasu Publishers (P.) Ltd. [TC No. 30 (Mad.) of 1979] where similar issue came up for consideration of the Court. He points out that the bottles are purchased in bulk and leased out in bulk. In fact, in the nature of the assessee's business, he cannot deal with each bottle separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them to others. In this case all the bottles purchased are leased to Spencers Co. for use in its aerated water business. As pointed out by the ITO, and about which there is no dispute, all the bottles, totalling to 30,20,000 are purchased in bulk, all the invoices are for large number of bottles and the value of each purchase is more than Rs. 750. Similarly, the leasing out to Spencer Co. is also done in bulk quantity and not in individual bottles. 8. The word 'plant' has been given a very wide meaning by the Courts as including any article or object used by a businessman for carrying on his business. The Delhi High Court in the case of CIT v. National Air Products Ltd. [1980] 126 ITR 196 explained the meaning of the word 'plant' in the following words : "The word 'plant' in its ordinary meaning is a word of wide import and it must be broadly construed having regard to the fact that articles like books and surgical instruments are expressly included in the definition of plant in section 43(3) of the Act. It includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business. It is not necessarily confined to an apparatus which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch such plant is first put into use by the assessee for the purposes of its business or profession. The question is what is the plant that is being put to use by the assessee for the purpose of its business. The plant in this case is 'bottles' and not each single bottle individually. The assessee is a leasing company and during the year, it purchased and leased out to Spencer Co. 30,20,000 bottles. In the very nature of the assessee's business, it cannot be handled each bottle separately and it had to purchase then in bulk and lease them in bulk. There is no dispute in this case that all the bottles are purchased in bulk and quantity of each purchase was more than Rs. 750. There is also no dispute that the value of each quantity leased out is also more than Rs. 750. In the circumstances, we are of the considered opinion that it is not correct to ignore the actual method of operation of the plant, viz., bottles in this case and artificially consider that each bottle constituted a separate plant, with which the assessee is carrying on its business. Similar, matter came up for consideration of the Madras High Court in the case of Tamil Murasu Publishers (P.) Ltd. In that case the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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