JUDGMENT
Abdul Hadi, J.
1. At the instance of the Revenue, the following questions of law have been referred to us by the Income-tax Appellate Tribunal under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) :
“1. Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the assessee is entitled to initial depreciation as claimed by it on the basis that it manufactures articles or things falling under item No. 8 of Ninth Schedule which reads ‘industrial and agricultural machinery’ ?
2. Whether, on the facts and circumstances of the case, the Tribunal was right law in holding that the subsidy received from SIPCOT by the assessee does not go to reduce the cost of the assets under section 43(1) of the Act for the purpose of depreciation ?”
2. In so far as the second of the abovesaid two questions is concerned, it is agreed by both the rival counsel that the said question is covered in favour of the assessee by the decision in CIT v. P. J. Chemical Ltd. and accordingly we answer the said second question in the affirmative and in favour of the assessee.
3. In so far as the first of the abovesaid two questions is concerned, the issue involved in the said question is, whether the assessee-respondent, which manufactures paper tubes and cones, required as accessories for winding yarn as part of textile machinery in the assessment year 1977-78, (is entitled to) initial depreciation allowance to the extent of Rs. 14,348 under section 32(1)(vi) of the Act in relation to the machinery installed by it for the purpose of business of manufacture of the abovesaid paper tubes and cones.
4. Section 32(1)(vi) of the Act allows initial depreciation “in the case of new machinery or plant . . . installed after” May 31, 1974, “for the purposes of . . . manufacture or production of any one or more of the articles or things specified in items 1 to 24 (both inclusive) in the list in the Ninth Schedule. …” The contention of the assessee is that the abovesaid paper tubes and cones manufactured, comes under “industrial machinery” spoken to in item No. 8 of the abovesaid Ninth Schedule. This contention was not accepted by the original assessing authority and so the allowance was negatived. But, the first appellate authority and the Tribunal concurrently granted the said allowance, holding that the said paper cones and tubes would come under the term “industrial machinery” used in the abovesaid item No. 8 of the Ninth Schedule.
5. The reasoning of the Tribunal may be gathered from the following observations in its order :
“In the absence of a definition of ‘industrial machinery’ under the Income-tax Act, a reference to the Industries (Development and Regulation) Act could not be irrelevant. Textile machinery appears in the First Schedule to that Act under the broad heading ‘industrial machinery’. It is listed as ‘textile machinery (such as spinning frames, carding machines, power looms and the likes including textile accessories)’. Now even the assessing authority does not dispute that these are accessories, but he says that paper cones and tubes delicate and inexpensive as they are, could not be treated as industrial machinery as such. He would perhaps grant the allowance only if an entire production unit is manufactured and not otherwise. We do not think that such a rigid interpretation is warranted. Since accessories are treated as textile machinery which is industrial machinery under the Act intended to regulate industries in India, we would be justified in accepting the assessee’s plea both on the basis of the spirit and letter of the law. We, therefore, agree with the first appellate authority on this issue.”
6. Learned counsel for the Revenue submits that the Tribunal erred in referring to the description of “industrial machinery” found under the heading in the First Schedule to the Industries (Development and Regulation) Act, 1951. He specifically points out that while in item No. 4 of the Fifth Schedule to the Act in connection with development rebate allowance under section 53(1)(b)(B)(i) of the Act, “industrial machinery” spoken to therein as specified in the abovesaid heading 8 in the First Schedule to the abovesaid Industries (Development and Regulation) Act, 1951, there is no such specification when in the abovesaid Ninth Schedule, item No. 8, the term “industrial and agricultural machinery” is used. In other words, according to him, the meaning of industrial machinery as used in the abovesaid item No. 4 of the Fifth Schedule, cannot be imported, when considering the initial depreciation under section 32(1)(vi) of the Act, with reference to which alone the abovesaid Ninth Schedule has come in. He also relies on India Leaf Spring Manufacturing Co. (P) Ltd. v. CIT , which relies on the definition of the term “machinery” given in Corporation of Calcutta v. Chairman of Cossipore and Chitpore Municipality, AIR 1922 PC 27, and holds that leaf springs used in the manufacture of trucks and other motor vehicles are not industrial machinery within the meaning of item No. 8 of the abovesaid Ninth Schedule and that initial depreciation under section 32(1)(vi) of the Act cannot be allowed in the case of machinery employed for the manufacture of the said leaf springs.
7. On the other hand, learned counsel for the assessee reiterates the abovesaid reasoning of the Tribunal. He also points out that in the abovesaid item No. 8 of the First Schedule to the Industries (Development and Regulation) Act, 1951, under the abovesaid heading “A. Major items of specialised equipment used in specific industries”, the first item of machinery is textile machinery “including textile accessories”. Thus, according to him, the abovesaid paper tubes and cones are such accessories to the textile machinery since without them, the textile machinery cannot be run. He also points out that the abovesaid Fifth Schedule, item No. 24 also refers to “component parts of the articles mentioned in item Nos. (4),.. ., that is to say, such parts as are essential for the working of the machinery referred to in the items aforesaid. ..” Therefore, according to him, since the abovesaid paper tubes and cones are essential in running the textile machinery, they are also textile machineries and as such are industrial machineries under the abovesaid item No. 8 of the Ninth Schedule also. He also points out, as indicated in the first appellate order also, that in one registration certificate issued to the assessee by the Textile Commissioner against the heading “Items of textile machinery manufactured”, the assessee has been described as manufacturing textile accessories and in another such certificate against the same heading, the words “paper cones and tubes and ring tubes” have been entered. Learned counsel for the assessee also relied on CIT v. Chitram and Co. Pvt. Ltd. .
8. We have considered the rival submissions. First of all, it is clear to us that in considering the meaning of the words “industrial machinery” used in item No. 8 of the abovesaid Ninth Schedule, the description of industrial machinery spoken to in item No. 4 of the abovesaid Fifth Schedule cannot be imported at all. The very fact that the Legislature has chosen to use the expression “industrial machinery” in one way in one Schedule and in another way in another Schedule, shows that the Legislature itself intended to give different meanings to the same term in the said two Schedules. If really, the Legislature wanted to have the same meaning in both the Schedules, it would have accordingly worded the said expression in the same way in both the Schedules. Therefore, it is clear to us that the Tribunal and the first appellate authority erred in proceeding on the footing that the meaning of the term “industrial machinery” used in item No. 8 of the Ninth Schedule could be the same as the meaning of the said term under item No. 4 of the Fifth Schedule.
9. Then coming to the meaning to be given to the words “industrial machinery” used in item No. 8 of the Ninth Schedule, no doubt, initially it must be stated that there is no definition of the term “industrial machinery” under the Act. But, we find that the Supreme Court in CIT v. Mir Mohammad Ali [1964] 53 ITR 165, has observed thus (page 171) :
“The Privy Council in the case of Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Municipality, AIR 1922 PC 27; [1922J ILR 49 Cal 190, hazarded the following definition of ‘machinery’. ‘The word “machinery” when used in ordinary language prima facie means some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and inter-dependent operation of their respective parts generate power, or evoke, modify, apply or direct natural forces with the object in each case of effecting so definite and specific a result’.
They had already observed that the word ‘machinery’ must mean more than a collection of ordinary tools. The Privy Council case was not a tax case but prima facie the ordinary meaning of the word ‘machinery’ – and the word ‘machinery’ is an ordinary and not a technical word – must, unless there is something in the context, prevail in the Indian Income-tax Act also. … According to the above definition, a diesel engine is clearly ‘machinery’.”
10. Thus, the Supreme Court has also adopted the abovesaid definition given by the Privy Council.
11. Further, in Indian Leaf Spring Manufacturing Co. (P) Ltd. v. CIT (1989] 175 ITR 639 also, the Andhra Pradesh High Court has given the same meaning to the term “machinery” and held that leaf springs used in the manufacture of trucks and other motor vehicles do not constitute “industrial machinery” within the meaning of the abovesaid item No. 8 of the Ninth Schedule to the Act and hence the machinery employed for manufacturing the said leaf springs is entitled to initial depreciation provided by section 32(1)(vi) of the Act. The relevant observation in the said decision is as follows (pages 641, 643 and 644) :
“The Tribunal has held that the ‘leaf springs’ manufactured by the assessee cannot be called ‘machinery’, for the reason that a leaf spring does not generate power, nor is it capable of evoking, modifying, applying or directing natural forces – a test evolved by the Privy Council in Corporation of Calcutta v. Chairman of the Cossipore and Chitpore Municipality, AIR 1922 PC 27. … It would be evident that all the decisions dealing with the meaning of the expression ‘machinery’ have drawn inspiration from the decision of the Privy Council, referred to supra. It has also been held that a part of machinery is also machinery. But, what appears to be essential is that there must be some mechanical contrivances which, by themselves or in combination with one or more other mechanical contrivances, by the combined movement and interdependent operation of their respective parts generate power or evoke, modify, apply or direct natural forces. … The other basis upon which the question can be approached is, whether ‘leaf springs’ are contrivances. It is difficult to say that a leaf spring can be called a contrivance, much less does it satisfy the various requirements mentioned in the definition. A leaf spring by itself does not generate power, nor is it capable of evoking, modifying, applying or directing natural forces, within the meaning of the said definition. It is only meant to take the load and to cushion the bumps and shocks which a vehicle takes during its movement.”
12. If we apply the same reasoning to the abovesaid paper tubes and cones, it is not difficult to hold that they are not industrial machinery, coming under the abovesaid item No. 8 of the Ninth Schedule. They cannot also be taken as mechanical contrivances which by themselves or in combination with one or more other mechanical contrivances, generate power or evoke, modify, apply or direct natural forces, even assuming that they are necessary or essential in running the textile machinery. We may also incidentally mention that the Tribunal has also noted that they have a short life and cost less (little less than Rs. 2 per unit). The decision relied on by learned counsel for the assessee in CIT v. Chitram and Co. Pvt. Ltd. has no application at all to the present case.
13. It is also relevant to notice that under entry 24 of the Fifth Schedule to the Act, an assessee manufacturing component parts of industrial machinery is eligible to claim development rebate under the provisions of section 33 of the Act. There is no corresponding entry in the Ninth Schedule covering the component parts of the industrial machinery in the Ninth Schedule of the Act.
14. Therefore, we answer the abovesaid first question in the negative and in favour of the Revenue. No costs.