JUDGMENT
Syed Shah Mohammed Quadri, J.
1. On the application of the assessee the following question is directed to be referred to this Court under s. 256(2) of the IT Act, 1961 (for short “the Act”), viz. :
“Whether motor cars used by an industrial undertaking would be called as ‘road transport vehicles’ for purposes of s. 32A of the IT Act, 1961 ?”
2. The assessee is manufacturing electrical conductors. In connection with its business it engaged motor cars in respect of which it claimed investment allowance of Rs. 58,732. The ITO did not permit deduction of the allowance claimed; so did the first appellate authority. Even the Tribunal did not agree with the submission of the assessee and dismissed the appeal on 30th November, 1983. It is that order which has given rise to the above question.
3. Mr. K. K. Viswanadham, learned counsel for the assessee, contends that having regard to the historical background of the development rebate, earlier granted under s. 33 of the Act, and subsequent introduction of the investment allowance, the intention of Parliament is to grant benefit to those who invested capital on “plant and machinery” and inasmuch as motor car is “plant and machinery” for purpose of the business of the assessee, allowance under that provision ought to have been held to be admissible.
4. Section 32A(1) of the Act provides for investment allowance. It reads as follows :
“32A. Investment allowance. – (1) In respect of a ship or an aircraft or machinery or plant specified in sub-s. (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent of the actual cost of the ship, aircraft, machinery or plant to the assessee;”
Section 32A(1) of the Act, extracted above, provides for allowing deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year. The investment allowance is twenty-five per cent of the actual cost of the ship, aircraft, machinery or plant. The amplitude of this section has been restricted in cases falling under provisos (a) to (d) appended thereto. We are concerned with the second proviso, clause (b), which is in the following terms :
“Provided further that no deduction shall be allowed under this section in respect of – . . .
(b) any office appliances or road transport vehicles; . . .”
5. In a very elaborate and interesting argument, learned counsel for the petitioner, Mr. Viswanadham, has contended that the investment allowance is not permissible under clause (b) of the second proviso in respect of any office appliances but in various judgments, the Courts have granted such an allowance, therefore, we should also grant allowance even if we come to the conclusion that the motor cars fall within the sweep of the phrase “road transport vehicles”.
6. It cannot be denied that the expression “road transport vehicles” has not been defined under the provisions of the Act for purposes of this section. But with reference to the definition given under the Motor Vehicles Act, learned counsel submits that inasmuch as the cars used by the petitioner are not “public service vehicles”, as the assessee is not charging for the transport of its employees and not earning any income from its use, that expression should be so interpreted as to mean vehicles other than motor cars where charges have not been collected by the assessee; it means only such a vehicle which can be termed as “public service vehicle”. The argument, though clever and interesting, has not appealed to us. Without analysing the argument in any detail we would like to observe that we do not find any warrant to import the meaning of the phrase “road transport vehicles” as given in the Motor Vehicles Act for purposes of s. 32A. Suffice it to say that if a word or expression is not defined in the Act in which it occurs, it will have to be interpreted in the sense in which the expression is understood generally in English. So understood “road transport vehicle”, in our view, includes “motor cars” on which the assessee is claiming investment allowance.
7. In CIT vs. Lever Brothers (India) Ltd. , the question arose under the Indian IT Act, 1922. A Division Bench of the Bombay High Court held that motor cars and motor lorries put into use in an assessee’s business are “machinery or plant installed” within the meaning of s. 10(2)(vib) of the IT Act and the assessee was entitled to “development rebate” in respect thereof. It was held that development rebate was allowable in respect of office appliances, though they were not included within the definition of the expression “plant” as given in s. 10(5) of that Act and were not fixed to the ground; and that conclusion was reached on the concession made by the Department that the office appliances were “machinery or plant” within the meaning of the said provision. We may note here that there was no provision in the said Act like clause (b) of the second proviso to s. 32A of the present Act, to exclude the benefit of the development rebate. So the ratio laid down in that judgment will not be of any help in this case.
In CIT vs. Sri Rama Vilas Service (P) Ltd. a Division Bench of the Madras High Court held that for purposes of s. 10(2)(via) and (vib) of the Indian IT Act, 1922, “buses and lorries” were “plant”.
In Fomra Brothers vs. CIT (1963) 49 ITR 684 (Mad) : TC 28R.367 the question was whether development rebate was allowable in the case of hired vehicles (lorries) under s. 10(2)(vib) of the Indian IT Act, 1922. The Division Bench of the Madras High Court took the view that the entire replacement of the vehicles themselves amounted to installation of new plant and machinery in so far as the business of hiring vehicles was concerned and the assessee was entitled to the development rebate.
8. The position thus obtaining under the 1922 Act, as reflected in the opinions of High Courts, referred to above, holding that even in respect of “motor vehicles” development rebate was permissible, was changed by excluding from the operation of the development rebate “road transport vehicles” w.e.f. 1st April, 1960, under the 1961 Act. That is how that the phrase “road transport vehicles” came to be used in s. 32A of the IT Act, 1961, w.e.f. 1st April, 1976, when “investment allowance” was introduced in the place of “development rebate”. This background also makes it clear that the intention of Parliament is not to grant “the investment allowance” in respect of “road transport vehicles”.
9. However, Mr. Viswanadham has further argued that the Calcutta High Court, the Gujarat High Court and the Karnataka High Court have granted investment allowance in respect of office appliances so the same approach may be adopted by us by granting investment allowance in respect of road transport vehicles as both the expressions occur in the same clause (b).
10. In CIT vs. Electronics Research Industries Pvt. Ltd. the question before the Karnataka High Court, was whether the internal telephone system should be considered as “plant” of the assessee’s factory and the assessee was entitled to investment allowance in respect thereof. It was not the case where the telephone system was considered as “office appliances” and the benefit of the allowance was extended.
In CIT vs. Shaw Wallace and Co. Ltd. , a Division Bench of the Calcutta High Court had to consider the question whether computer fell within the meaning of “office appliances”. The Division Bench observed thus :
“Having regard to the nature and function of the computer and the data processing system, it cannot be said that they were office appliances. A data processing machine is a complicated machine which cannot be easily operated by laymen and a special training is necessary in order to equip a person with the knowledge and art of operating these machines. The installation and operation of the machines is on a scientific basis and, even for the purposes of installation, certain special facilities have to be provided in the form of air-conditioning or a particular temperature. The purposes for which such machines which can be described as computers are used are well-known and in highly scientifically developed systems, they have their own roles to play and they cannot be equated with office appliances which would be of a much simpler nature . . .”
Thus, it is clear that the Calcutta High Court did not treat “computer” as “office appliances”. It is on a different basis that the investment allowance was held to be permissible in that case.
Even in CIT vs. Thyristors Controls Pvt. Ltd. , the Gujarat High Court did not hold as contended, that “books” were office appliances and yet investment allowance was permissible. The learned judges of the Division Bench of the Gujarat High Court having referred to the definition of “plant” in s. 43(3) of the Act, held that “books” would be “plant” within the meaning of s. 32A(1).
11. Thus, in none of these cases the Court held that “office appliances” were entitled to investment allowance. In those cases investment allowance was held to be permissible because the allowance claimed was held to fall under s. 32A(1) but not covered by the proviso. In view of the clear and unambiguous language of clause (b) of the second proviso, which is an exclusionary provision, we cannot but give effect to the intention of Parliament holding that road transport vehicles are not entitled to investment allowance.
12. Learned counsel, however, submits that the Karnataka High Court in CIT vs. Mahant Oil Industries Pvt. Ltd. , held that s. 32A of the IT Act, 1961, should receive a liberal construction to effectuate the basic idea behind the provision. There can be no doubt about the proposition and with respect we agree with the observation of the learned judge. But we should also bear in mind the caution sounded by the Supreme Court in CIT vs. N. C. Budharaja & Co. . Speaking for the Supreme Court his Lordship, B. P. Jeevan Reddy, J., observed :
“The principle of adopting a liberal interpretation which advances the purpose and object of beneficent provisions cannot be carried to the extent of doing violence to the plain and simple language used in the enactment. It would not be reasonable or permissible for the Court to rewrite the section or substitute words of its own for the actual words employed by the legislature in the name of giving effect to the supposed underlying object. After all, the underlying object of any provision has to be gathered on a reasonable interpretation of the language employed by the legislature.”
It was further observed :
“A statute cannot always be construed with the dictionary in one hand and the statute in the other. Regard must be had to the scheme, context and . . . the legislative history of the provision.”
13. Keeping the above principle in mind, it cannot but be held that the intention of Parliament is to exclude “road transport vehicles” (motor cars) from the benefit of “investment allowance” provided under s. 32A.
For the above reasons, the above question is answered in the affirmative, that is, in favour of the Revenue and against the assessee.
The reference is answered accordingly. No costs.