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TMI Blog1997 (4) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... was eligible for development rebate only at 15 per cent. instead of at 40 per cent. as allowed by the Commissioner of Income-tax (Appeals) ?" The reference is for the assessment year 1976-77. The necessary relevant facts which give rise to this question are as under : The assessee is a public limited company, doing the business of civil engineers and contractors. The contracts executed during the accounting year concerned were construction of bridges, cooling towers, reservoirs, etc. In the proceedings before the Income-tax Officer, the company claimed that they were entitled to initial depreciation in respect of plant and machinery added by them during the accounting year concerned under the provisions of section 32(1)(vi). The total c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression " manufacture or production ", and that these words are to be used against specific items mentioned in the Ninth Schedule. The Tribunal also gave a finding that in respect of some of the items, the word " construction " was a more happy usage than the words " manufacture or production ". It also pointed out that in the Ninth Schedule, item No. 15 was " ship " and item No. 16 was " aircraft ". It was pointed out by the Tribunal that in common parlance, it is seen as " construction " of ships and " construction " of aircraft, and that the same expression was used in the definition of " industrial company " in the Finance Act. The Tribunal also referred to the case of CIT v. N. U. C. Pvt. Ltd. [1980] 126 ITR 377 (Bom), and gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was using them in the construction of bridges and that the pontoon was more or less a floating platform from which the men could work. It was also pointed out by the Revenue that in the earlier claim of the company for the assessment year 1964-65, the Tribunal was considering whether a barge could be considered as a ship within the meaning of the expression in section 33 of the Income-tax Act, 1961, and that the question whether a pontoon could be considered a ship never arose in that matter. Learned counsel appearing for the assessee argued that Appendix I under the heading " IV-ships " includes ocean going ships, fishing vessels, speed boats, and, therefore, they should also include a pontoon. He also relied upon the judgment of the Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes the word " navigation " as, " communication by canals and rivers, voyage ". The meaning of the verb " navigate " is given as " to sail over or up or down (sea, river) ". Chamber's Dictionary says that to navigate means " to conduct or manage a ship in sailing or flying " and " navigation " is " travel or traffic by water or air ". So, conveying goods, men and material from one place to another is the sine qua non for being qualified as ship. If a vessel leaves, say, point A for destination point B, it can be well said that it has navigated, and that, its job for that trip is over. It is thereafter of no further use, till it is again put for the use in the water for navigation. Thus, " navigation ", necessarily, unmistakably, and invaria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We, therefore, do not accept the contention of learned counsel appearing for the assessee-company that pontoons are ships and, therefore, the assessee-company is entitled to claim initial depreciation under section 32(1)(vi). Even in the Gujarat judgment, on which learned counsel for the assessee-company heavily relied, the Income-tax Officer therein, was of the opinion that pontoons could not be treated as ships, since they were incapable of movement by themselves because they had no engines. Giving this finding, he allowed development rebate at the rate of 25 per cent. instead of 40 per cent., treating pontoons as " plant ". Even the Division Bench of the Gujarat High Court has observed in its judgment that it is, therefore, difficult t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essels which took in its sweep all the vessels including pontoons, which were operated in inland waters. This, according to them, was the legislative intent, as manifested in the Income-tax Rules, 1962. After hearing both counsel and after going through the Gujarat High Court judgment and after perusing the order of the Tribunal in the present case at hand, we are of the considered view that such legislative intent cannot be attributed or inferred, and such a broad meaning cannot be given to the word " ship " so as to include " pontoons " within its sweep. We, therefore, answer the question referred to us in the affirmative and against the assessee-company. The reference is accordingly answered in the above stated terms. No order as t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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