1991 (3) TMI 72

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.... the production is primarily oil, storage tank is absolutely necessary for the purpose of the business of the assessee. The assessee constructed a tank with mild steel sheets, which is used for the storage of hexane and the manufactured oil. The assessee claimed investment allowance under the provisions of section 32A of the Income-tax Act, 1961, treating the storage tank as "plant". The Incometax Officer disallowed this claim. This order was affirmed by the Commissioner of Income-tax (Appeals), who held that a storage tank cannot be treated as "plant" or "machinery". The Appellate Tribunal, however, accepted the contention of the assessee and held that the tank is an apparatus used by the assessee in the manufacturing process and as such c....

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....owever, they may be treated as forming a particular category of articles or goods or things which are used for the purpose of business or profession. In other words, whatever is necessary or facilitates the business or profession of an assessee and which can be termed as a means or incidental to the means of the said business or profession, may form one single category. In that sense, the definition of "plant" may be understood. The meaning attributable to a term will have to be understood with reference to the context and the purpose for which a particular provision is enacted. Under section 32A, an assessee is given certain benefits by way of allowance in respect of the investments made by the assessee to ear the income. The allowance ....

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..... Chanderkumar, however, sought to distinguish this decision by pointing out that the tubewell requires mechanical contrivance for its operation and, therefore, it will be part of the phrase "plant or machinery" The Supreme Court considered the concept of plant in CIT v. Taj Mahal Hotel [1971] 82 ITR 44. The assessee was a hotel. Sanitary and pipeline fittings were installed in one of its branches. Depreciation allowance was claimed on these investments. The Supreme Court held that sanitary and pipeline fittings fell within the definition of "plant". The Supreme Court also pointed out that the intention of the Legislature was to give the word "plant" a wide meaning. At page 48, the Supreme Court referred to an English case where partitio....