9911796707
TMI Blog1991 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... Basin Wet Dock and the assessee is entitled to depreciation and development rebate on the expenditure incurred on excavation of Rs. 77,80,000 and masonry including R. C. C. work, etc., of Rs. 81,33,000 in respect of the said walls of the dock ?" For the sake of convenience, we propose to deal with the second question first. The assessee incurred expenditure of Rs. 1,76,35,639 in all on the Kasara Basin Wet Dock. It claimed that the entire expenditure represented the cost of plant and machinery and that it was entitled to depreciation and development rebate on that basis. The Income-tax Officer held that the assessee was entitled to development rebate on the expenditure amounting to Rs. 17,22,639 only as that amount alone represented the cost of plant and machinery. According to him, the remaining amount represented the cost of excavation and masonry including R. C. C. work, etc. For this purpose, he derived support from our court's decision in the case of Jayasingrao Piraji Rao Ghatge v. CIT [1962] 46 ITR 1160 ; the decision in the case of Dumbarton Harbour Board v. Cox [1918] 7 TC 147 (C. Sess)and the House of Lords decision in the case of Barclay, Curle and Co. Ltd. [1970] 76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 43(3) to show that the word "plant", though not defined as such, has to take colour from the subsequent items included in its definition. This is what is required to be done in view of the principle of interpretation ejusdem generis. In particular, he pointed out that all items included in the definition are movable items. That would indicate that only movable items are to be included in the expression "plant". Lastly, he pointed out that the House of Lords decision was rendered on the basis of certain facts found by the Commissioners in the light of evidence led before the Commissioners. Similar facts have not been found by the Tribunal in the present case and, therefore, even if it is assumed that the principle laid down by the House of Lords in that case is applicable, it cannot be applied to this case. In this context, Shri Jetley submitted that the place where a plant is located can never be a part of the plant because it is only a location where it is housed. In this regard, he placed strong reliance on our court's judgment in Jayasingrao Piraji Rao Ghatge v. CIT [1962] 46 ITR 1160. He also relied on our court's decision in the case of CIT v. Sandvik Asia Ltd. [1983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Gas Co. [1935] 19 TC 481. The majority decision, it was further pointed out, has placed reliance on the decision in Jarrold v. John Good and Sons Ltd. [1963] 1 WLR 214, 225 (CA). The majority observed that, in view of the decision in Jarrold v. John Good and Sons Ltd. [1963] 1 WLR 214, the case of Margrett v. Lowestoft Water and Gas Co. [1935] 19 TC 481, though not specifically overruled, was no longer to be considered an authority to look at. The decision in Jarrold's case, he further stated, was approved by our court and the Supreme Court. The minority judges in the case decided by the House of Lords proceeded, it was pointed out, on the assumption that a dam could never be plant. The majority has not said anything specific about a dam. However, referring to our court's decision in the case of CIT v. Tata Hydro Electric Power Supply Co. Ltd. [1980] 122 ITR 288, he pointed out that expenditure on a dam has also been considered as constituting the cost of the plant. The sum and substance of Shri Dastur's argument has been that in view of the Supreme Court decision and our court's decision, there can be no dispute that even a building can, in an appropriate case, be plant. What ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for the equipment to function without the particular type of structure. 5. The particular apparatus or item must be used for carrying on the assessee's business and must not be his stock-in-trade. The matter has to be considered in the context of the particular business of the assessee, e.g., books are a lawyer's plant but a bookseller's stock-in-trade." The majority judgment of the House of Lords in IRC v. Barclay, Curle and Co. Ltd. [1970] 76 ITR 62 has been, if not approved as such, quoted with approval both by the Supreme Court and our court in the cases supra. We also agree with Shri Dastur that the fact that the expression "plant" has been defined in section 43(3) will not make any difference for the reason that the definition has been noticed both by our court and the Supreme Court in the above judgments and it was held that the definition did not in any way restrict the purport and the scope of the expression "plant". On the other hand, it widened it. Therefore, the mere fact that, in the English Act, the word "plant" was not defined will not, in our view, make any difference. This would mean that all buildings are not plant, but certain buildings or structures can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be a floating dock. In the case of a floating dock, different considerations would arise. However, he has not been able to point out any authority for the proposition that there was really any material difference between dry dock and wet dock in this regard. Shri Dastur had, on the other hand, invited our attention to the Chambers' Dictionary of Science and Technology in which the words dry dock, floating dry dock and wet dock were defined. As per the definition, it was only the floating dry dock which could be said to be floating or movable. Both dry docks and wet docks are docks under water level. The only material difference appears to be that whereas a dry dock water is excluded by means of gates or caissons after the dock has been emptied, in the wet dock water is impounded at a suitable level by means of dock gates, and entrance is generally effected by means of locks. In our opinion, there is, thus, no material difference between a dry dock and a wet dock from the point of view of application of functional tests laid down by the Supreme Court and other courts. Accordingly, we answer the second question in the affirmative and in favour of the assessee. The facts pertainin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
