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TMI Blog1963 (2) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... les, with the object of increasing sitting capacity for passengers so that it may augment its gains. The Income-tax Officer as also on appeal the Appellate Assistant Commissioner found the amount expended by the assessee on replacement of old bodies on its vehicles by new bodies as representing capital expenditure and this has not been a matter of controversy between the parties. The claim was disallowed by the Income-tax Officer but the Appellate Assistant Commissioner allowed it as initial depreciation item under the said provision. On a further appeal by the respondent, the Income-tax Appellate Tribunal, Delhi Bench B, has reversed the appellate order restoring that of the Income-tax Officer holding that the body of a bus is neither a m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting judicial opinions have prevailed but the cases concerned not with replacement of an old body by a new body of a vehicle but replacement of a petrol engine by a diesel engine. The first case is Maneklal Vallabhdas Parekh v. Commissioner of Income-tax [1959] 37 ITR 142. In that case on behalf of the assessee initial depreciation was claimed under clause (vi) both on the ground that the new diesel engine that replaced the old petrol engine in the vehicle was within the expression "plant" as also "machinery" as used in paragraph 2 of clause (vi ), it having been stated in the arguments that "vehicles" are particularly included in the expression "plant" by sub-section (5) of section 10. The learned j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the view of the Bombay High Court in the first mentioned case holding that machinery does not cease to be machinery merely because it has to be used in conjunction with one or more machines, nor merely because it is installed as part of a manufacturing or industrial plant. They were of the opinion that a diesel engine, replacing a petrol engine in a vehicle, was by itself "machinery" within the meaning of section 10(2)(vi) and continued to be machinery even after it was made an integral part of the assessee's bus. This case has been followed in Mrs. George Mathew v. Commissioner of Income-tax [1961] 43 ITR 535 , the learned judges in this case also not accepting the view of the Bombay High Court as to the scope of the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for use. So that there is no substance in this argument. Paragraph 2 of clause (vi) in sub-section (2) of section 10, for the present purpose, refers to "plant being new", and it is clear that a plant that is partly new and partly not new is not within the scope of these words. Again sub-section (5) of section 10 defines "plant" to include vehicles, and here again the intention does not appear to be to include part of a vehicle such as the body of a vehicle in that definition. The learned counsel for the assessee then presses that the substantial part of the vehicle so far as the assessee is concerned is the body of the vehicle which provides seating capacity for the passengers and for this reason a body of a vehicle s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case is not helpful to the assessee and even in Mir Mohd. Ali's case (supra), in which reference to Hinton's case (supra) has been made, the learned judges have pointed out that that case is not an authority for the decision of a case like the one that was before them. So Hinton's case (supra) does not advance the argument on behalf of the assessee.
In the circumstances the approach to the matter by the learned Income-tax Appellate Tribunal is correct and the answer to the question is that the assessee is not entitled to the initial depreciation under section 10(2)(vi), paragraph 2, as claimed by it. There is no order in regard to costs in this reference.
Inder Dev Dua J.-I agree. X X X X Extracts X X X X X X X X Extracts X X X X
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