High Court Decision: Safe Deposit Lockers as "Plant" for Rebate, Electrical Installations Not Qualifying

The High Court affirmed the Tribunal's decision that safe deposit locker cabinets qualify as "plant" for development rebate, allowing the rebate for specific assessment years. However, the High Court ruled against the assessee regarding electrical installations, determining they were not "plant" but ordinary fixtures, leading to the denial of the development rebate claim. The assessee was ordered to pay the costs of the reference due to the primary question being decided against them.

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Issues Involved:

1. Whether safe deposit locker cabinets qualify as "plant" for development rebate.
2. Whether electrical installations qualify as "plant" for development rebate.

Summary:

Issue 1: Safe Deposit Locker Cabinets as "Plant"

The Tribunal held that safe deposit locker cabinets fell under the term "plant" and allowed the development rebate for the assessment years 1962-63, 1963-64, and 1964-65. The Commissioner referred the question to the High Court. The High Court, referencing CIT v. Union Bank of India Ltd. [1976] 102 ITR 270 (Bom) and CIT v. Central Bank of India Ltd. [1976] 103 ITR 196 (Bom), affirmed the Tribunal's decision, answering the question in the affirmative and in favor of the assessee.

Issue 2: Electrical Installations as "Plant"

The assessee claimed development rebate on electrical installations u/s 33 of the I.T. Act, 1961. The AAC and the Tribunal rejected this claim, considering the installations as ordinary fixtures. The High Court reviewed various precedents, including Sundaram Motors Pvt. Ltd. v. CIT [1969] 71 ITR 587 and CIT v. Indian Turpentine and Rosin Co. Ltd. [1970] 75 ITR 533 (All), which discussed the broad definition of "plant." However, the High Court concluded that the electrical installations in question were not special installations necessary for banking business but were typical of any business office. Therefore, they were part of the premises and not "plant" used for carrying on the business. The High Court confirmed the Tribunal's decision, answering the question in the affirmative and against the assessee.

Costs:

The costs of the reference were ordered to be paid by the assessee, as the primary question argued was question No. 2.

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