HINDUSTAN AERONAUTICS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal has referred the following questions of law for the opinion of this court :

(2.) THE assessee had claimed that bins, racks and shelves were "plant" and as such extra shift allowance was admissible on them. THE Income-tax Officer was of the opinion that these bins, racks and shelves were "furniture" and not "plant" as claimed by the assessee and hence the question of allowing extra shift allowance in respect of these items did not arise. In the assessee's first appeal before the Commissioner of Income-tax (Appeals), the assessee's contention was accepted and the Income-tax Officer was directed to allow extra shift allowance for the said items. This decision was challenged by the Revenue in second appeal before the Tribunal. In so far as the first and second questions are concerned, the Tribunal reversed the order of the Commissioner of Income-tax (Appeals) and held that bins, racks and shelves were essentially items of furniture and it is erroneous to treat them as plant only on the ground that the locale of their use was the factory.

(3.) THE term "plant" had come up for interpretation in a number of decisions and the courts have evolved what is known as the "functional test" as against merely the "amenities test" for determining as to what constitutes "plant". THE classic definition of "plant" as given by Lindley L. J. with reference to the Employers' Liability Act in Yarmouth v. France [1887] 19 QBD 647, reads as under (at page 658) :