COMMISSIONER OF INCOME TAX Vs. WARNER HINDUSTAN LIMITED

JUDGEMENT

(1.) THE following two questions have been referred to this court for its opinion by the Tribunal at the instance of the revenue:

(2.) THE facts relevant for answering the questions are these: THE assessee, Warner Hindustan Ltd., Hyderabad, is a public limited company carrying on business of manufacturing pharmaceuticals. THE relevant assessment years are 1968-69 and 1969-70. THE assessee spent a sum of Rs. 1,26,254 for digging a well in its factory and it was admittedly for the purpose of carrying on its business. THE ITO disallowed the assessee's claim for depreciation and development rebate on the sole ground that the well did not come within the expression "plant". THE AAC accepted the claim of the assessee and granted the rebate. THE revenue carried that order in appeal contending that the well was not meant for the purpose of business use. THE Tribunal negatived the contention of the revenue and opined that the well was admittedly dug in the factory premises for its business purpose. In so coming to the conclusion, the Tribunal applied the ratio of the decision of the Supreme Court in CIT v. Taj Mahal Hotel [1971] 82 ITR 44. THE other question raised before the Tribunal by the revenue was that the order of the ITO made on April 6, 1973, giving effect to the appellate order of the AAC is not an appealable order. That contention too was negatived by the Tribunal relying upon the decision of the Calcutta High Court in Kooka Sidhwa and Co. v. CIT [1964] 54 ITR 54. Questioning the findings of the Tribunal on the aforesaid two points, the revenue moved for reference to this court.

(3.) THE Gujarat High Court too in Elecon Engineering Company's case [1974] 96 ITR 672 was of the view that the interpretation put by the earlier decision of the Bombay High Court was not justified. THE ratio of the decision of the Supreme Court in Taj Mahal Hotel's case [1971] 82 ITR 44, in our view, when applied to the facts of the present case, would bring in "well" also within the term "plant" in view of the fact that the well was admittedly sunk for the purpose of carrying on the business of manufacturing pharmaceuticals by the assessee. THE definition of "plant", in our view, is of wide amplitude so as to take in even a well, provided that the well was dug for the purpose of carrying on the business of the assessee, as in this case, manufacture of pharmaceuticals.