Broad meaning of "ship" extends higher development rebate to pontoons and tugs under income-tax rules.

Pontoons and tugs fall within the expression "ship" for the purpose of the higher development rebate under the Income-tax Act, 1961. Although "ship" is not defined in the Act, the depreciation schedule in the Income-tax Rules treats tugs and similar vessels as ships, and that wider treatment supports a broad construction for development rebate purposes. On that basis, tugs are plainly covered and pontoons, being flat-bottomed boats used for ferrying or lifting, are also included. The practical effect is eligibility for the higher rebate rate applicable to new ships.

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Issues: Whether pontoons and tugs fall within the expression "ship" for the purpose of higher development rebate under the Income-tax Act, 1961.

Analysis: Section 32 deals with depreciation and section 33 with development rebate. Under section 33, a higher rebate is available for a new ship. The expression "ship" is not defined in the Act, but the depreciation table in Appendix I to the Income-tax Rules treats tugs and similar vessels as ships. In view of the wide manner in which vessels are described in the depreciation schedule, the expression "ship" cannot be given a narrow construction for section 33. Tugs are plainly covered, and pontoons, being flat-bottomed boats used for ferrying or lifting purposes, also fall within the expanded meaning of "ship".

Conclusion: Pontoons and tugs are covered by the expression "ship" and are entitled to development rebate at the higher rate.

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