Business equipment as plant and gross dividend relief were recognised for income-tax purposes under settled precedent.

The expression 'plant' was treated as having wide import and was applied to air-conditioning equipment installed in a safe deposit vault because it functioned as apparatus used in the business, not merely as part of the setting. Relief under the dividend provisions was also held to extend to the gross dividends, without deduction of interest or administrative expenses, following binding Division Bench precedent. The article therefore states that business-serving installations may qualify as plant for income-tax purposes and that dividend relief may be computed on the full dividend where precedent so requires.

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Issues: (i) Whether the air-conditioning equipment installed in the assessee's safe deposit vault was 'plant' within the meaning of the relevant provision; (ii) whether relief under the dividend provisions was available on the whole of the dividends without deduction of interest and administrative expenses.

Issue (i): Whether the air-conditioning equipment installed in the assessee's safe deposit vault was 'plant' within the meaning of the relevant provision.

Analysis: The issue was treated as governed by the principle that the expression 'plant' is of wide import and includes apparatus used in carrying on the business, even if it is not moving machinery. Reliance was placed on the approved view that installations serving the business function, including air-conditioning installations, may qualify as plant. The air-conditioning equipment in the safe deposit vault was therefore regarded as an apparatus used for the business of the assessee and not merely as part of the setting.

Conclusion: The air-conditioning equipment was held to be 'plant' and the answer was in favour of the assessee.

Issue (ii): Whether relief under the dividend provisions was available on the whole of the dividends without deduction of interest and administrative expenses.

Analysis: The issue was covered by an earlier Division Bench decision of the same court, which had already determined that the statutory relief was admissible on the gross dividends without making the proposed deductions. On that basis, the question was answered in conformity with the earlier ruling.

Conclusion: The relief was held to be available on the whole of the dividends without reducing them by interest and administrative expenses, and the answer was in favour of the assessee.

Final Conclusion: Both referred questions were answered in favour of the assessee, so the assessee succeeded on the substantive tax issues decided by the court.

Ratio Decidendi: An installation used as an apparatus in the business, including an air-conditioning installation serving the functional needs of the trade, may constitute 'plant' for income-tax purposes, and gross dividend relief is allowable where the governing precedent so requires.

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