K.T. Thakore, Accountant Member
1. This appeal which relates to the assessment year 1980-81 is filed by the assessee against the order made by the learned Commissioner under Section 263 of the Income-tax Act, 1961 (‘the Act’). The assessee is a leading advocate. On examination of the records of the case the learned Commissioner noticed that in computing the total income for the assessment year under appeal the ITO by bis order dated 26-3-1981 had allowed the claim of the assessee for deduction under the first proviso of Section 32(1)(ii) of the Act of the actual cost of wall book cabinets aggregating to Rs. 29,668, on the footing that the cost of each unit of the book cabinet was less than Rs. 750. According to the learned Commissioner, the wall book cabinet in respect of which full deduction was allowed was neither a plant nor machinery within the meaning of the said provisions. Therefore, according to the learned Commissioner the ITO’s order allowing the claim for deduction as aforesaid was clearly erroneous which has resulted in prejudice to the interest of the revenue, The learned Commissioner, therefore, issued a show cause notice as to why the assessment should not be revised so that the depreciation should be restricted to 10 per cent of the actual cost of the wall book cabinet by treating the same as an item of furniture. The action of the learned Commissioner was resisted firstly, on the ground that the order of the ITO was not erroneous nor was it prejudicial to the interest of the revenue. It was claimed that as the assessee’s claim was allowed on the basis of full disclosure made by him, the learned Commissioner had no jurisdiction to revise the said assessment. Secondly, on merits it was contended-that book cabinets were plant within the meaning of first proviso to Section 32(1)(ii). In support of the claim reliance was placed on various decisions set out in para 6 of the order of the learned Commissioner. The learned Commissioner examined the assessee’s contention on merit with reference to the decision of their Lordships of the Gujarat High Court in the case of CIT v. Elecon Engg. Co. Ltd.  96 ITR 672 as also the decision of their Lordships of the Supreme Court in the case of CIT v. Taj Mahal Hotel  82 ITR 44 and observed that according to the tests laid down in the said decisions, the book cabinets could not be treated as plant. He further relied on the decision in the case of Chandan Metal Products (P.) Ltd. v. State of Gujarat  23 STC 29 (Guj.). He further observed that according to the dictionary meaning of expression ‘furniture’, it was clear that wall book cabinet should be treated as an item of furniture particularly when the functional use was taken into consideration. In this view of the matter, the learned Commissioner held that the actual cost of wall book cabinet amounting to Rs. 28,206 should be treated as an item of furniture and the depreciation be allowed at the rate applicable to furniture. In regard to other items, viz., office tables Rs. 1,190 and smoke glass Rs. 272, the same should also be treated as furniture. Since the order of the ITO to the contrary was prejudicial to the interest of the revenue being erroneous, the learned Commissioner directed the ITO to withdraw the claim as allowed by him (the ITO) under the first proviso to Section 32(1)(ii) and allow relief to the assessee in the manner indicated by him in his order under appeal.
2. Being aggrieved the assessee has come up in appeal before us. Shri Patel at the outset submitted that he did not wish to submit on the point regarding jurisdiction of the learned Commissioner to invoke provisions of Section 263 nor did he wish to contest the disallowance in regard to two items, viz., office tables Rs. 1,190 and telephone gap with smoke glass Rs. 272. He, therefore, confined his submissions with reference to the claim of the assessee for a sum of Rs. 28,206 being the total value of wall book cabinets. Shri Patel also stated that each item of wall book cabinet was valued at less than Rs. 750 and, therefore, if the assessee were to succeed in persuading that the wall book cabinet should be treated as plant, the entire claim would be allowable under the said proviso to Section 32(1)(ii). Shri Patel next submitted that the issue was covered by the decision of the Tribunal in the case of M.G. Doshit v. ITO [IT Appeal No. 915 (Ahd.) of 1981, dated 30-1-1982] (vide paras 7.1 and 7.2 of the said order). He, however, submitted that he was not resting his submissions only on the said decision. The mainstay of his submission was that the learned Commissioner has overlooked the fact that the functional use of the book cabinet serves the purpose as a plant and not as a furniture. In other words according to Shri Patel, an item of furniture in a given case may perform a function of a plant having regard to its functional use. This material aspect has been lost sight of while reviewing the case of the assessee by the learned Commissioner. In this connection he submitted that the expression ‘plant’ had to be construed very widely and it is an inclusive definition under Section 43(5) of the Act which includes ships, vehicles, books, scientific apparatus and surgical equipments used for the purposes of the business or profession. Therefore, it was clear that the books were specifically included within the meaning of expression ‘plant’. The wall book cabinets, which were used for arranging books which are the tools of the assessee’s profession, should have the same colour or attribute of plant for the simple reason that the books cannot be kept properly and in the manner required for efficient conduct of profession without the aid of wall book cabinets. In other words, according to Shri Patel, the assessee as a lawyer had to keep the books which are required for reference or otherwise in such a manner that the same are easily and conveniently available. Therefore, the book cabinets subserve the same function as books and, therefore, should be treated as a plant in this particular case though it could not be denied generally that such wall book cabinet may be treated as an item of furniture. In other words, it is the functional use which is relevant and material to determine the question as to whether the book cabinets fell within the expression ‘plant’ or ‘furniture’. In Elecon Engg. Co. Ltd.’s case (supra) it is laid down that the expression ‘plant’ must fulfil the relevant test in the assessee’s trading activity, i.e., it must be a tool of taxpayer’s trade. Having regard to this well settled test, Shri Patel submitted that the ITO was justified in upholding the claim of the assessee under the aforesaid provisions. Shri Patel also relied on various decisions in support of his submissions which we shall consider a little later. The learned departmental representative, on the other hand relying on the order of the learned Commissioner, submitted that the expression ‘furniture’ is not defined in the Act. Therefore, a natural meaning must be assigned to the said explanation. Now wall book cabinet is ordinarily an item of furniture and its character cannot be changed by different uses made by the assessee. In other words, according to the learned departmental representative, a chair or a table would remain as items of furniture irrespective of the use to which they may be put. It was, therefore, submitted that the learned Commissioner was justified in revising the assessment as he did.
3. We have considered the rival submissions. As pointed out earlier, the only question which falls for our consideration and determination is whether the assessee’s claim for deduction of a sum of Rs. 28,206 being the total cost of wall book cabinets was rightly allowed by the ITO under first proviso to Section 32(1)(ii) and that the learned Commissioner was not justified to revise the said order on merits, by holding the said expenditure having been incurred towards cost of furniture. In this connection we may point out at the outset that we are unable to accept the view canvassed before us on behalf of the revenue that the functional use should be disregarded as the character of an item of furniture is not altered by functional use to which the same may be put to. This proposition as canvassed by the learned departmental representative suffers from many infirmities. It is true that a chair is an item of furniture but different consideration would certainly prevail in case of a dentist’s chair which is used for treating patients. In such a case the dentist’s chair with various appliances and gadgets attached to it may perform the function of tool of the dentist’s profession and then by the functional use to which such a chair is put to would be required to be treated as a plant and not an item of furniture. Similarly, a table may be an item of furniture without more but a table in an operation theatre cannot be treated as furniture but having regard to the functional use, it may be required to be treated as a plant. The reason is simple. It is the tool of the doctor’s profession. This view derives support from the decision of their Lordships of the Allahabad High Court in CIT v. Kanodia Cold Storage  100 ITR 155 in which building and equipment used for manufacturing purposes was treated as plant. Similarly, service line was held to be part of entire set up for functioning of the cold storage and as such treated as plant. Again their Lordships of the Madras High Court in the case of Addl. CIT v. Madras Cements Ltd.  110 ITR 281 have held that the dictionary meaning of the ‘plant’ comprehends building employed in carrying on trade or other industrial business and, hence, special reinforced concrete foundation would come within the scope of expression ‘plant’. Thus, safe deposit locker was held to be plant in the case of CIT v. Bank of India Ltd.  118 ITR 809 (Bom.) as also in the case of Syndicate Bank v. CIT  16 Taxman 363 (Kar.). Their Lordships of the Supreme Court in Taj Mahal Hotel’s case (supra) have held that sanitary and pipeline fittings should be treated as plant under Section 10(5) of the Indian Income-tax Act, 1922 (‘the 1922 Act’) by observing that the intention of the Legislature was to give the word ‘plant’ a wide meaning. Their Lordships of the Gujarat High Court in the case of Elecon Engg. Co. Ltd. (supra) have lucidly explained the concept of expression ‘plant’ in the following words :
The word ‘plant’ in its ordinary meaning is a word of wide import and it must be broadly construed having regard to the fact that articles like books and surgical instruments are expressly included in the definition of plant in Section 43(3) of the Act. It includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business. It is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. It would not, however, cover the stock-in-trade, that is, goods bought or made for sale by a businessman. It would also not include an article which is merely a part of the premises in which the business is carried on. An article to qualify as ‘plant’ must furthermore have some degree of durability and that which is quickly consumed or worn out in the course of a few operations or within a short time cannot properly be called plant. But an article would not be any the-less plant because it is small in size or cheap in value or a large quantity thereof is consumed while being employed in carrying on business. In the ultimate analysis the inquiry which must be made is as to what operation the apparatus performs in the assessees’ business.
The relevant test to be applied is : does it fulfil the function of plant in the assessees’ trading activity ? Is it the tool of the taxpayer’s trade ? If it is, then it is plant, no matter that it is not very long lasting or docs not contain working parts such as a machine does and plays a merely passive role in the accomplishment of the trading purpose.
The test laid down in the above decision was again considered by their Lordships of the Gujarat High Court in the case of CIT v. Tarun Commercial Mills Ltd. [IT Reference No. 221 of 1976, dated 21-9-1983/ 22-9-1983] since reported in  16 Taxman 18 (Guj.) In this case the question which arose for consideration was that whether fans and air-conditioner could be treated as plant in case of the assessee, a textile mill. It is stated, inter alia, as follows :
…In the ultimate analysis, as pointed out by the Division Bench in Elecon Engg. Co. Ltd.’s case (supra), the inquiry must be as to what operation the apparatus performed in the assessee’s business and the relevant test is that : does it fulfil the function of plant in the assessee’s trading activity ? Or is it tool of the taxpayer’s trade ? On applying this test, we are of the opinion that it would be difficult to agree with the learned Counsel for the revenue that they are parts of the premises. On the contrary, in our opinion, the appliances are the instruments which, on the application of the functional test, would advance the performance of the business of the assessee. They are, in our opinion, therefore, entitled to be included within the term ‘plant’.
4. Without multiplying the authorities on the subject, though they are many, it may be stated broadly that the test to be applied is the functional test, that is to say, does it fulfil the function of plant in the assessee’s trading activity ? Or is it a tool of the taxpayer’s trade ? Applying this test to the facts of the case, it is clear firstly, that the assessee is a leading advocate. Secondly, the books are tools of his trade. Thirdly, the books are required to be arranged in a proper manner to facilitate easy, speedy and convenient reference. Fourthly, for this purpose, it is absolutely necessary to arrange the same in wall book cabinets which are designed and utilised for the said purpose. And lastly, it is not in dispute that the wall cabinets are not put to any other use than for the purpose of arranging the books required for the assessee’s profession. In the light of these facts, therefore, it is clear to us that the wall book cabinet subserved the same function as books used for the purpose of profession. The use of wall cabinet, therefore, cannot be divorced from the main purpose or function of the assessee’s profession. Thus, having regard to the functional use which is a material consideration to determine the question whether an item will fall in category of furniture or plant, we are inclined to hold that the wall book cabinet must be treated as plant and was rightly treated so by the ITO. The decision of the learned Commissioner, therefore, to the contrary, in our opinion, for the reasons discussed above, “cannot be sustained. We, accordingly, quash his order and restore the order of the ITO.
5. In the result, the appeal is partly allowed.