Depreciation for generator sets upheld under an inclusive renewable energy entry, with wind-energy wording confined to pumps.

A generator set was held to fall within clause (xiii) of item (10A) of Appendix I to the Income-tax Rules, 1962 and to qualify for depreciation at 30%. The High Court applied noscitur a sociis and ejusdem generis, construing the entry as referring to two distinct categories: special devices including electric generators, and pumps running on wind energy. The qualifying words "running on wind energy" were held to attach only to pumps, not to electric generators. On that interpretation, the inclusive depreciation entry covered the generator set as a renewable energy device, and depreciation at the higher rate was available to the assessee.

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Issues: Whether a generator set falls within clause (xiii) of item (10A) of Appendix I to the Income-tax Rules, 1962 so as to qualify for depreciation at 30 per cent.

Analysis: The entry was construed by applying the rules of noscitur a sociis and ejusdem generis. The wording of clause (xiii) was read as referring to two distinct categories, namely special devices including electric generators and pumps running on wind energy. On that construction, the qualifying words "running on wind energy" were held to attach only to pumps and not to electric generators. The entry was treated as inclusive and the generator set was regarded as a renewable energy device within the meaning of the depreciation schedule.

Conclusion: The generator set falls within clause (xiii) of item (10A) of Appendix I to the Income-tax Rules, 1962 and is eligible for depreciation at 30 per cent., in favour of the assessee.

Ratio Decidendi: Where a depreciation entry uses inclusive wording and separates electric generators from pumps running on wind energy, the qualifying condition attached to the latter cannot be read into the former; the provision must be construed to give effect to the distinct categories expressly mentioned.

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