Initial depreciation requires a new, self contained plant; vehicle bodies as non self contained parts do not qualify for claim.

Whether new bodies fitted to passenger buses qualify for initial depreciation under paragraph 2 of clause (vi) in sub section (2) of Section 10 turns on the definition of "plant" and the requirement that the plant be new and self contained; a vehicle body is not a self contained unit and derives utility only when affixed to a vehicle, so parts of a vehicle do not qualify as plant for initial depreciation. The effect is that the claimed initial depreciation for new bus bodies is not allowable.

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Issues: (i) Whether the assessee is entitled to initial depreciation of Rs. 32,947 under paragraph 2 of clause (vi) in sub-section (2) of Section 10 of the Income-tax Act, 1922 in respect of new bodies fitted on its passenger buses.

Analysis: The statutory provision grants an allowance as initial depreciation where "the machinery or plant being new... has been installed" and sub-section (5) of Section 10 includes vehicles within the definition of "plant". The question is whether a part of a vehicle (the body) can itself be regarded as a "plant" or as machinery being new for the purposes of paragraph 2 of clause (vi). Precedents concerning replacement of engines distinguish between a whole vehicle being included as plant and parts of a vehicle forming part of that plant; earlier decisions hold that a component forming part of a plant does not necessarily fall within the definition of plant for initial depreciation unless it is a self-contained unit capable of independent use. A vehicle body is not a self-contained unit and derives utility only when affixed to a vehicle; therefore it cannot be treated as a plant in itself. The statutory phrase "plant being new" requires the plant to be new in its entirety rather than partly new and partly old, and the definition including vehicles does not, in context, extend to parts of vehicles such as bodies.

Conclusion: The assessee is not entitled to initial depreciation of Rs. 32,947 under paragraph 2 of clause (vi) in sub-section (2) of Section 10 of the Income-tax Act, 1922.

Ratio Decidendi: For the purpose of initial depreciation under paragraph 2 of clause (vi) in sub-section (2) of Section 10, a "plant" must be a new, self-contained unit; a part of a vehicle such as a body is not a plant in itself and cannot qualify for initial depreciation even though vehicles are included within the definition of plant.

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