Development rebate for vehicles: buses and lorries qualify as installed plant when put into business use.

Buses and lorries fall within the statutory definition of "plant", which expressly includes vehicles, and the word "installed" in the development rebate provision is not limited to immovable fixtures. For mobile plant, installation is complete when the asset is placed in position for service or use. As buses and lorries were purchased and put on the road for business use, they were treated as installed plant and development rebate was allowable on them.

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Issues: Whether buses and lorries constitute plant or machinery "installed" for the purposes of development rebate under section 10(2)(vib) of the Income-tax Act, and whether such rebate is admissible on their purchase and use in the business.

Analysis: The statutory definition of "plant" in section 10(5) expressly includes vehicles, and the expression "installed" in section 10(2)(vib) was held to bear the same practical meaning as in section 10(2)(via). The word was not confined to things fixed to earth or immovable in nature. In relation to plant capable of mobile use, installation is complete when the plant is placed in position for service or use. Buses and lorries, when purchased and put on the road for the business, satisfied that test because they were set up for service in the manner of their use as vehicles.

Conclusion: Buses and lorries are plant within the statutory definition, they can be regarded as installed when put into service on the road, and development rebate is allowable on them. The answer was therefore in favour of the assessee.

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