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TMI Blog1991 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of the business of the assessee. The assessee constructed a tank with mild steel sheets, which is used for the storage of hexane and the manufactured oil. The assessee claimed investment allowance under the provisions of section 32A of the Income-tax Act, 1961, treating the storage tank as "plant". The Incometax Officer disallowed this claim. This order was affirmed by the Commissioner of Income-tax (Appeals), who held that a storage tank cannot be treated as "plant" or "machinery". The Appellate Tribunal, however, accepted the contention of the assessee and held that the tank is an apparatus used by the assessee in the manufacturing process and as such constitutes "plant". Hence, this reference at the instance of the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or goods or things which are used for the purpose of business or profession. In other words, whatever is necessary or facilitates the business or profession of an assessee and which can be termed as a means or incidental to the means of the said business or profession, may form one single category. In that sense, the definition of "plant" may be understood. The meaning attributable to a term will have to be understood with reference to the context and the purpose for which a particular provision is enacted. Under section 32A, an assessee is given certain benefits by way of allowance in respect of the investments made by the assessee to ear the income. The allowance granted has a close nexus to the means employed to earn the income which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the tubewell requires mechanical contrivance for its operation and, therefore, it will be part of the phrase "plant or machinery" The Supreme Court considered the concept of plant in CIT v. Taj Mahal Hotel [1971] 82 ITR 44. The assessee was a hotel. Sanitary and pipeline fittings were installed in one of its branches. Depreciation allowance was claimed on these investments. The Supreme Court held that sanitary and pipeline fittings fell within the definition of "plant". The Supreme Court also pointed out that the intention of the Legislature was to give the word "plant" a wide meaning. At page 48, the Supreme Court referred to an English case where partitions effected for office accommodation were treated as "plant". The approach ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant". It was held that it is an apparatus with equipment necessary for drawing water for the purpose of industrial production and for the labour. These two decisions of the Andhra Pradesh High Court and of the Calcutta High Court indicate that an object or a thing which is beneficial to the carrying on of the business of the assessee to earn taxable income could be treated as "plant". With respect, we entirely agree with this approach. In the instant case, the assessee is carrying on the business of producing oil. A storage tank is absolutely necessary for the activities of the assessee. In these circumstances, the Appellate Tribunal was fully justified in upholding the claim of the assessee and treating the storage tank as "plant". Con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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