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TMI Blog2012 (7) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Tribunal is right in law in holding that the word "being" as used in Section 35D(2)(c)(iv) is not 'illustrative' but only 'restricted' to? These three appeals arise out of the common order of the Tribunal in the appeals filed by the assessee as well as by the Revenue. 3. The issues raised in these appeals relate to the disallowance of Euro issue expenditure on the right of the assessee to come within the provisions of Section 35D of the Income Tax Act. On the question of the assessee's entitlement for amortisation under Section 35-D, the Tribunal held that as the expenditure was for extension of the industrial undertaking, the same qualified for deduction in terms of Section 35D. However, on the aspect of expenditure to be considered under Section 35D, the Tribunal referred to Section 35D(2) Sub Clause (iv) and pointed out that the deduction allowable under the Act must be allowed in accordance with the provisions of the Act. The word "being" used in the Section is not restrictive and hence, the deduction could be allowed. In the circumstances, by order dated 04.02.2005, the Tribunal directed the Assessing Officer to re-compute the deduction according to the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st approximately Rs. 6,493 million for expanding this production capacity of vehicles, particularly the cargo range of vehicles, at its plants at Hosur and Bhandara. The company also planned, in due course, to replace the entire Leyland range of vehicles with the cargo range. The company was also planning to invest approximately Rs. 722 million in the modernisation of its Ennore plant, in particular, the paint shop. Apart from that, a sum of Rs. 1640 million was proposed to be invested in routine capital replacement, modernisation of other existing facilities and development. The assessee pointed out that the assessee also planned to go for capacity expansion of its Units at Hosur I and II. In the context of its proposal for expansion, the assessee claimed that it was entitled to claim deduction under Section 35D. The said claim was however rejected, taking the view that Section 35D deduction was available in respect of expenditure incurred in connection with the expansion for the purpose of setting up of a new industrial unit. Since the document did not reveal that there was any expansion or setting up of a new industrial unit, the assessee did not qualify for deduction under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal had once again set aside the orders of the authorities below and remanded the matter back to the Assessing Officer to re-compute the deduction in accordance with the provisions of the Act, in its order dated 4.2.2005. 9. Even though learned Standing Counsel appearing for the Revenue submitted initially that after the order of the Tribunal dated 21st November 2008, nothing survived in the present Tax Case for this Court to consider the question raised in the Tax Cases filed by the assessee and the Revenue, he hastened to add that considering the fact that the Tribunal had directed the Assessing Officer to pass fresh orders in terms of the directions of the Tribunal dated 04.02.2005, which is a subject matter of consideration before this Court, the merits of the question raised be decided by this Court. 10. Thus as far as the assessee's case is concerned, the claim is for deduction of the entire amount under Section 35D, whereas the Department's claim is that the assessee is not entitled to deduction of the entire expenditure under Section 35D, since the assessee did not qualify itself to be considered as an eligible undertaking under Section 35D of the Income Tax Act. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n connection with the setting up of a new industrial plant. On the other hand, as already seen from the purpose of the issue that it related to the extension of the industrial undertaking, there is no definition of the word "extension" under the Act. A reference to P. Ramanatha Aiyar's Law Lexicon Second Edition shows that although the word "expansion" was considered as related to different fields, yet, the one in relation to industrial activity gives the meaning as "extension". The passage contained in the said book is reproduced as follows: " IN CONNECTION WITH RAILWAYS AND TRAMWAYS. When an 'Extension' of a Railway or Tramway is spoken of, no one supposes "that the thing meant is merely to prolong the existing line or to increase its breadth for laying down more rails. Branches are contemplated as well as the original main line when extensions are spoken of. That is certainly a common use of language; not can their lordships see that in point of etymology or philology it is incorrect." [Shanghai Corp v. Mc Murray, 69 LJPC 20). " Thus going by the said meaning assigned to the word "extension", quite apart from the horizontal expansion in the industrial undertaking, vertical exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "being" is to be treated as "like" or "including", then there was no necessity to specifically mention those items of equipment, viz., ventilators used with anaesthesia apparatus and ventilators other than those used with anaesthesia as given in Appendix I Entry III(8)(ix) of the Income Tax Rules, 1962, carrying a particular percentage of depreciation. Thus, after referring to the deduction, this Court observed as follows: "14. Let us see what can be used in the above extracts to substitute the word "being". For example, in the sentence, "excise duty being a levy on the manufacture or production of the goods" can be read to mean, "excise duty which is a levy on the manufacture or production of the goods.". Therefore, how we may understand the word "being" used in the depreciation table is, it means, energy saving devices "which are" the devices mentioned therein. Further, in the same table, the subject category in 8(ix) has the caption "specialised boilers and furnaces" and the word "drier" is not used. In the same table, the words "ventilator used with anesthesia apparatus" and the words "ventilators other than those used with anesthesia" are used with reference to "life saving . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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