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TMI Blog1984 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing the claim for deduction as aforesaid was clearly erroneous which has resulted in prejudice to the interest of the revenue. The learned Commissioner, therefore issued a show cause notice as to why the assessment should not be revised so that the depreciation should be restricted to 10 per cent of the actual cost of the wall book cabinet by treating the same as an item of furniture. The action of the learned Commissioner was resisted firstly, on the ground that the order of the ITO was not erroneous nor was it prejudicial to the interest of the revenue. It was claimed that as the assessee's claim was allowed on the basis of full disclosure made by him, the learned Commissioner had no jurisdiction to revise the said assessment. Secondly, on merits it was contended that book cabinets were plant within the meaning of first proviso to section 32(1)(ii). In support of the claim reliance was placed on various decisions set out in para 6 of the order of the learned Commissioner. The learned Commissioner examined the assessee's contention on merit with reference to the decision of their Lordships of the Gujarat High Court in the case of CIT v. Elecon Engg. Co. Ltd. [1974] 96 ITR 672 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said decision. The mainstay of his submission was that the learned Commissioner has overlooked the fact that the functional use of the book cabinet serves the purpose as a plant and not as a furniture. In other words according to Shri Patel, an item of furniture in a given case may perform a function of a plant having regard to its functional use. This material aspect has been lost sight of while reviewing the case of the assessee by the learned Commissioner. In this connection he submitted that the expression 'plant' had to be construed very widely and it is an inclusive definition under section 43(3) of the Act which includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purposes of the business or profession. Therefore, it was clear that the books were specifically included within the meaning of expression 'plant'. The wall book cabinets, which were used for arranging books which are the tools of the assessee's profession, should have the same colour or attribute of plant for the simple reason that the books cannot be kept properly and in the manner required for efficient conduct of profession without the aid of wall book cabinets. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be disregarded as the character of an item of furniture is not altered by functional use to which the same may be put to. This proposition as canvassed by the learned departmental representative suffers from many infirmities. It is true that a chair is an item of furniture but different consideration would certainly prevail in case of a dentist's chair which is used for treating patients. In such a case the dentist's chair with various appliances and gadgets attached to it may perform the function of tool of the dentist's profession and then by the functional use to which such a chair is put to would be required to be treated as a plant and not an item of furniture. Similarly, a table may be an item of furniture without more but a table in an operation theatre cannot be treated as furniture but having regard to the functional use, it may be required to be treated as a plant. The reason is simple. It is the tool of the doctor's profession. This view derives support from the decision of their Lordships of the Allahabad High Court in CIT v. Kanodia Cold Storage [1975] 100 ITR 155 in which building and equipment used for manufacturing purposes was treated as plant. Similarly, servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt test to be applied is : does it fulfil the function of plant in the assessees' trading activity ? Is it the tool of the taxpayer's trade ? If it is, then it is plant, no matter that it is not very long lasting or does not contain working parts such as a machine does and plays a merely passive role in the accomplishment of the trading purpose. " The test laid down in the above decision was again considered by their Lordships of the Gujarat High Court in the case of CIT v. Tarun Commercial Mills Ltd. [IT Reference No. 221 of 1976, dated 21-9-1983/22-9-1983] since reported in [1984] 16 Taxman 18 (Guj.) In this case the question which arose for consideration was that whether fans and airconditioner could be treated as plant in case of the assessee, a textile mill. It is stated, inter alia, as follows :". . . In the ultimate analysis, as pointed out by the Division Bench in Elecon Engg. Co. Ltd.'s case, the inquiry must be as to what operation the apparatus performed in the assessee's business and the relevant test is that : does it fulfil the function of plant in the assessee's trading activity ? Or is it tool of the taxpayer's trade ? On applying this test, we are of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X
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