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TMI Blog1989 (7) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... of barges owned by it. The assessee also hires out barges to other parties. These barges are ranging between 750 and 1000 dwt. and are self-propelled. 4. On the aforesaid facts, the assessee claimed deduction u/s 80-J of the Act in respect of the barges owned by it which the I.T.O. had accepted in the assessments framed u/s. 143(3) read with sec. 144B of the Act. However, the only dispute between the assessee and the I.T.O. was in respect of the treatment to be given to liabilities in working out the 'capital employed'. The assessee's contention was that the liabilities should be ignored while the I.T.O. was of the opinion that in view of the retrospective amendment made in Sec. 80-J of the Act by the Taxation Laws (Amendment) Act, 1980, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable to the same. To this extent the ITO under-assessed the assessee's income. 6. Therefore, an enhancement notice has been issued to the assessee on 13-3-1985 for both the years. The appellant replied that a barge should be considered as a ship in view of the definition given in the General Clauses Act, 1897. According to sub-section 55 of section 3 of that Act a ship includes every description of vessel used in navigation not exclusively propelled by oars. 7. I am unable to agree with the appellant. The General Clauses Act refers only to the ship as a vessel used for 'navigation'. Further the Shorter Oxford Dictionary never included a barge under the word 'ship'. 8. According to the Dictionary a barge is defined as : ' i. A smal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee strongly argued that the CIT (A) was not justified in withdrawing the deduction already granted by the I.T.O. u/s. 80J of the Act in respect of the barges owned by the assessee. In this connection, he stated before us the nature of business carried on by the assessee (already reproduced above) and the fact that in the assessment years 1978-79 and 1979-80 the I.T.O. had allowed deduction u/s. 80J of the Act in respect of the barges owned by the assessee on the net value of the capital employed by the assessee. Till to-date no remedial action has been taken by the Revenue either u/s. 154 or 263 of the Act. For the years under appeal also the I.T.O. had granted relief u/s. 80J of the Act, as he was of the view that a barge is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not entitled to deduction u/s. 80J of the Act in respect of the value of such barges. Placing before us a copy of the order of the CIT (A) dated 18-5-1987 in the assessee's own case for the assessment year 1983-84, more particularly paragraph A thereof which reads as under : 4. The next contention is regarding the non-allowance of investment allowance on the Barge acquired this year. The Income-tax Officer has not allowed investment allowance on the Barge on the ground that it was not a Ship. It has been clarified that the Barge is a ship in Board's Instruction No.F.202/4/86-ITA.II dated 29-1-1987. Therefore, the appellant is entitled to investment allowance on the Barge if it has been engaged in the business of operation of Ships. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of " trawlers " which would come within the meaning of the word " ship ". Here also he pointed out that the Hon'ble High Court has referred to Part I of Appendix I to the Income-tax Rules, 1962, which describes the " ship " as a class of vessel under the head " ships ". Relying on the decision of the Hon'ble Supreme Court in the case of CIT v. Mir Mohammad Ali [1964] 53 ITR 165, the learned representative for the assessee submitted that since in the instant case barges are self-propelled vessels, the same should be treated as a " ship " for the purpose of granting deduction u/s. 80J of the Act. Finally, he relied on the order of the Tribunal, Bombay Bench 'D' in the case of First ITO v. Kolhapur Oxygen Acetylene (P.) Ltd. [1987] 22 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defined in the Act and the Rules made thereunder. Therefore, it would be necessary to refer to the meaning of " ship " appearing in other statutes like General Clauses Act, Carriage of Goods Act, Marine Insurance Act as wen as in the dictionary. When one refers to these Acts/Dictionary, one finds that very wide meaning is given to the word " ship ". The judicial as well as dictionary meaning of the word " ship " mentioned above also supports the stand taken on behalf of the assessee that a barge should be considered as a ship for the purposes of deduction contemplated u/s. 80J of the Act. In our considered opinion the descriptive meaning of the word " ship " contained in Part I of Appendix I to the I.T. Rules, 1962, clinches the issue invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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