At, High Court of Punjab and Haryana
By, THE HONOURABLE MR. JUSTICE S.S. SODHI & THE HONOURABLE MR. JUSTICE N.K. KAPOOR
For the Appearing Parties: Ajay Kumar Mittal, S.S. Mahajan, Advocates.
(1) THE matter here concerns the assessee's claim for initial depreciation under section 32 (1) (vi) of the Income-tax Act, 1961, in respect of an electric generator installed by it for its business.
(2) THE assessee, Messrs. Dalmia Biscuits Limited, Rajpura, derives its income from manufacture and sale of biscuits. During the relevant assessment year 1976-77, the assessee installed and commissioned an electric generator for its business at a cost of Rs. 6,56,533 and then put forth a claim for initial depreciation for this generator under section 32 (1) (vi) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ). It is the declining of this claim by all the authorities under the Income-tax Act that has now led to the following question being referred for the opinion of this court, namely :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the initial depreciation under section 32 (1) (vi) of the Income-tax Act, 1961, was not allowable on the generator set installed by the assessee during the accounting period relevant to the assessment year 1976-77 for the generation of electricity or power for consumption in the process of manufacture of its own products ?"
(3) THE question posed has indeed to be answered in the affirmative, in favour of the Revenue and against the assessee in view of the clear and plain interpretation of the relevant statutory provision. The crucial words in section 32 (1) (vi) of the Act are "new machinery or plant Installed for purposes of business of generation or distribution, of electricity or any other form of power". The use of the words here "for purposes of business of" admit of only one interpretation, namely, that the machinery or plant installed must be for the purposes of business of generation or distribution of electricity or any other form of power. In other words, it is only where the business is of generation or distribution of electricity or any other form of power that the installation of new machinery or plant qualifies for initial depreciation in terms of section 32 (1) (vi) of the Act.
(4) MR. S. S. Mahajan, counsel for the assessee, sought, on the other hand, to contend that as the generator had been installed for generation of electricity which was required for the business of the assessee, it must be taken to satisfy the requirements of section 32 (1) (vi) and the assessee was thus entitled to the depreciation claimed. This is indeed a contention which cannot be sustained. It is a well-established rule of interpretation of statutes that every word of a statute has to be assumed to have been deliberately and consciously incorporated therein by the Legislature and has thus to be given a meaning and effect. Courts are, therefore, enjoined to avoid such interpretation as would leave any part of the provision enacted without effect.
(5) THE plain and obvious meaning of the relevant words used in section 32 (1) (vi) of the Act p
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rovides no escape from the conclusion that, as the business of the assessee was not that of generation or distribution of electricity or any other form of power, its claim for depreciation in respect of the generator was rightly declined. (6) THIS reference-is answered accordingly. There will, however, be no order as to costs.