Broad construction of electric supply depreciation rules included overhead cables and wires, supporting the higher depreciation rate.

Rule 8 of the Indian Income Tax Rules, 1922 was construed broadly for electric supply undertakings, so that comprehensive words covering plant and machinery included overhead cables and wires unless expressly excluded. The special depreciation entry for such undertakings was treated as a consolidated provision, and the omission to mention cables and wires separately did not confine the allowance to the lower rate. On that construction, depreciation at 10% was available, and the departmental view limiting it to 5% was rejected.

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Issues: Whether overhead cables and wires used by an electric supply undertaking fall within the special rate applicable to electric plant, machinery and boilers under rule 8 of the Indian Income Tax Rules, 1922, so as to entitle the assessee to depreciation at 10%.

Analysis: Rule 8 classifies depreciation for machinery and plant under different heads and provides a special rate for electric machinery, including overhead cables and wires, under one category, while separately dealing with electric supply undertakings under another. The comprehensive expression used for electric supply undertakings was understood as covering the plant and machinery of such undertakings as a whole, without excluding overhead cables and wires merely because they were not specifically mentioned. The special entry for electric supply undertakings was treated as operating in a broad and consolidated manner, and the absence of an express reference to overhead cables and wires did not justify confining the allowance to the lower rate.

Conclusion: The assessee was entitled to depreciation at 10%, and the higher rate claimed was correctly allowed.

Final Conclusion: The reference was answered in favour of the assessee, and the departmental view limiting depreciation to 5% was rejected.

Ratio Decidendi: Where a depreciation provision for an electric supply undertaking uses comprehensive words for plant and machinery, the provision must be construed broadly so as to include overhead cables and wires unless they are expressly excluded.

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