Broad meaning of plant under income-tax law allowed business development rebate for office and transport equipment.

Section 10(2)(vib) of the Indian Income-tax Act, 1922 was construed broadly to grant development rebate for new plant and machinery used in business. The court rejected the restrictive view that the allowance was confined to particular industries or only to plant yielding income by direct use. It held that "plant" includes apparatus and appliances kept for permanent employment in the business, and that "installed" covers introduction or placement in position for service or use. Motor cars, jeeps, bicycles, typewriters, office appliances, survey instruments, adometers, electric fans and electric installations were treated as plant used in the assessees' trades, so the claimed rebate was allowable and the disallowance unsustainable.

---

---

Issues: Whether the applicants were entitled to development rebate under section 10(2)(vib) of the Indian Income-tax Act, 1922 for plant and apparatus such as motor cars, jeeps, bicycles, typewriters, office appliances, survey instruments, adometers, electric fans and electric installations used in their businesses.

Analysis: The provision was construed in the light of its legislative history and the object of granting a concession to all business users of new plant and machinery installed for business purposes. The restrictive view that the allowance was confined to selective industries or to plant yielding income by direct use was rejected. The term "plant" was given its ordinary business meaning, covering apparatus and appliances kept for permanent employment in the business, and the word "installed" was read as including introduction or placing in position for service or use. On that approach, the articles in question were held to be plant used in the assessees' trades and businesses and therefore within the allowance.

Conclusion: The applicants were entitled to the development rebate claimed, and the disallowance was held to be unsustainable.

---