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TMI Blog1997 (7) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... f the word "paint" in the list of articles in entry 26 of the Eleventh Schedule and consequently holding that the assessee-company was entitled to investment allowance?" The reference pertains to the assessment year 1980-81. The brief facts giving rise to this reference can be narrated as follows: The assessee-company installed new machinery worth Rs. 16,01,651 for the manufacture of a product, which is described as "powder coating". The commercial name of the said powder coating is "Hawco Plast Powder Coating". The assessee-company claimed investment allowance under section 32A of the Income-tax Act, 1961, on the cost of new plant and machinery. The point for determination before the Income-tax Officer was, whether the powder coati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay, has filed this reference. We have heard Mr. Khatri, learned counsel for the Revenue, and Mr. Atul Jasani, learned counsel for the assessee-company/respondent. We have also perused carefully the orders of the Income-tax Officer, Commissioner of Income-tax (Appeals) and of the Tribunal, and for reasons given below, we find no reason to interfere with the order passed by the Tribunal. The Eleventh Schedule contains the list of articles or things which are specifically excluded for the purpose of claiming investment allowance. Entry 26 in the Eleventh Schedule at the relevant time contained following items: "Pigments, colours, paints, enamels, varnishes, blacks and cellulose lacquers." In the present case, the only point which is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a "paint". In short, it has to be said that if it is a paint, it can never be in a dry form or in a powder or granule form. If the article or thing is not liquid, then it can be anything else, but not paint. Now, coming to the facts of the present case, it is evident that the Hawco Plast Powder Coating, which is the product of the assessee-company, is not in liquid form, nor it is required to be converted into a liquid form. Moreover, in the case of ordinary paints, no chemical change take place, while as far as Hawco Plast Powder Coating is concerned, chemical changes do take place. The assessee-company had produced before the Commissioner of Income-tax (Appeals) and also before the Tribunal letter dated November 2, 1983, by Shri K. C. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tul Jasani, learned counsel for the assessee-company/respondent drew our attention to the decision of this court in CST v. Colour Chem Ltd. [1968] 22 STC 90. The question which was referred to the Division Bench under the sales tax reference (S. T. R. No. 32 of 1965) was whether pigment powders or pigment emulsions fell within the term "paints" which was included in entry 39 of Schedule C and entry 22 of Schedule E to the Bombay Sales Tax Act. While giving opinion on this question, the Division Bench, after discussing the word "paint" in its common parlance as used in plain language, so also, after considering the various definitions of the word "paint", came to the conclusion that paint was defined as pigmented liquid composition, and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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