Factory electrical installations treated as plant where they function as tools of trade and support efficient machinery operation.

Electrical fittings and installations in a factory can qualify as "plant" where, in their wide statutory sense under section 43(3), they function as tools of the trade rather than mere part of the premises. The controlling test is whether the item performs an operative role in the assessee's trading activity. On that reasoning, factory electrical installations necessary for smooth functioning, proper lighting, and efficient operation of machinery were treated as plant, entitling the assessee to development rebate.

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Issues: Whether electrical installations in the assessee's factory constituted "plant" for the purpose of development rebate.

Analysis: The expression "plant" in section 43(3) of the Income-tax Act, 1961 was applied in its wide sense. The controlling test was whether the item performed a function in the assessee's trading activity and served as a tool of the trade, rather than being merely part of the premises. The electrical fittings and installations were found to be installed in the factory, necessary for smooth functioning of the plant, and essential for supplying proper light to workers so that the machinery could be operated efficiently.

Conclusion: The electrical installations were held to be plant, and the assessee was entitled to development rebate for both assessment years.

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