Inclusive definition of plant covers hotel sanitary and pipeline fittings used as essential business equipment

An inclusive statutory definition of "plant" was applied to extend the ordinary meaning of the term to fixtures and equipment integral to the conduct of a hotel business. Sanitary fittings and pipeline fittings used for drainage and water supply were treated as necessary business equipment and therefore as plant, notwithstanding their description as furniture and fittings for depreciation purposes under the rules. The statutory meaning was not controlled by the depreciation classification. On that basis, the fittings qualified for development rebate.

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Issues: Whether sanitary fittings and pipelines installed in a hotel constituted "plant" within the meaning of section 10(5) of the Indian Income-tax Act, 1922, so as to qualify for development rebate under section 10(2)(vib).

Analysis: The definition of "plant" in section 10(5) is inclusive and enlarges the ordinary meaning of the word rather than restricting it. The Court applied the ordinary and popular sense of the expression, noting that fixtures employed in carrying on the business of boarding and lodging are integral to the functioning of a hotel. Sanitary fittings and pipeline fittings were treated as fixtures necessary for drainage and water supply and, therefore, as equipment used in the business. The fact that depreciation had been claimed under the rules as furniture and fittings did not control the statutory meaning of "plant" under the Act, because the rules could not cut down the scope of the statute.

Conclusion: Sanitary fittings and pipeline fittings installed in the hotel were held to be "plant", and the assessee was entitled to development rebate. The question was answered in the affirmative, in favour of the assessee.

Ratio Decidendi: Where a taxing statute uses an inclusive definition, the defined term retains its ordinary meaning and extends to fixtures or equipment that are integral to the carrying on of the business, even if they are also capable of being described under another depreciation category.

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