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TMI Blog1992 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... y within the meaning of item No. (4) of the Sixth Schedule to the Income-tax Act, 1961, and allowing the assessee-company relief under section 80-I of the said Act in respect of its income arising from the manufacture of miner's cap lamps ? " The assessee is a public limited company. The business of the assessee is to manufacture automobile ancillaries, equipments for generation of electricity, etc. The relevant assessment year is 1972-73. The controversy relates to disallowance of a part of claim of the assessee under section 80-1 of the Act. In its original return, the assessee claimed relief under section 80-1 to the extent of Rs. 15,396 which was subsequently revised to Rs. 10,467. The relief was claimed in respect of 3 items, namely, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance was placed by the Revenue on an earlier order of the Tribunal in the case of the assessee itself for the assessment year 1971-72, wherein it had considered this question in the context of item No. (4) of the Fifth Schedule to the Act in connection with the grant of development rebate at higher rate and held that these items though meant for the purpose of mining cannot be said to be major items of specialised equipment, namely, mining machinery. In that case, the Tribunal was also of the view that the items appearing in the list of items prepared by the Coal Council Sub-Committee were equipment of underground mining machinery and other equipment required for a standard unit which is a much broader category, the items specified there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve per cent. thereof, in computing the total income of the company. " The expression " priority industry " has been defined in clause (7) of section 80B in the following terms : " priority industry" means the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule or the business of any hotel where such business is carried on by an Indian company and the hotel is for the time being approved in this behalf by the Central Government. " (emphasis supplied) The Sixth Schedule contains the list of articles and things referred to in sections 80B(7) and 80-1 of the Act. Item No. (4) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n several industries, such as the equipment required for various 'unit processes': (1) Size reduction equipment -crushers, hall mills, and the like (2) Conveying equipment - bucket elevators, skip hoists, cranes, derricks and , the like (3) Size separation units - screens, classifiers and the like (4) Mixers and reactors - Kneading mills, turbo mixers and the like (5) Filtration equipment - filter presses, rotary filters and the like (6) Centrifugal machines (7) Evaporators (8) Distillation equipment (9) Crystallisers (10) Driers (11) Power-driven pumps-reciprocating, centrifugal, and the like (12) Air and gas compressors and vacuum pipes (excluding electrical furnaces) (13) Refrigeration plants for industrial use (14) Fire-fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opment and Regulation) Act, mining safety lamps can be held to be " mining machinery " within the meaning of item No. (4) of the Sixth Schedule to the Income-tax Act as set out above. If the answer is in the affirmative, the assessee would be entitled to relief under section 80-1, otherwise not. We have carefully considered the relevant provisions set out above. The scheme of section 80-I is clear. It intends to give some special deduction to a company by way of incentive in computation of its income in respect of its profits and gains attributable to any priority industry. Priority industry has been defined in clause (7) of section BOB to mean, inter alia, the business of manufacture or production of any one or more of the articles or thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific a result. " The Supreme Court reiterated the observation of the Privy Council that the word " machinery " must mean something more than a collection of ordinary tools ". It was held that the meaning given by the Privy Council to the word machinery, though given in a case which was not tax case, should prevail in the Income-tax Act also unless there is something in the context. Applying the aforesaid test laid down by the Privy Council and approved by the Supreme Court to the facts of the present case, it is clear that mining safety lamp cannot be held to be mining machinery. At the most, it may be terme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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