ORDER
R. Rangayya, Accountant Member
1. The assessee-firm runs a poultry farm. For the assessment year 1983-84, it claimed investment allowance on cages that have been installed in the premises for housing chicks on the ground that they constituted plant. The ITO, however, held that the cages cannot be classified as plant and machinery and so investment allowance was not admissible. On appeal the Commissioner (Appeals) upheld the view of the ITO that the cages to house chicks could not be considered as plant and machinery in the appellant’s case.
2. The assessee is now in appeal before us contending that the lower authorities were not correct in rejecting the claim for investment allowance on the cages. It may be noted that the assessee pressed its claim for investment allowance only in respect of cages and not in respect of building in which such cages were fixed. Shri K.R. Ramamani, the learned representative of the assessee, contends that the word ‘plant’ has been given a wide meaning. Plant in its ordinary sense includes whatever is used by the businessman for carrying on the business except his stock-in-trade. As the cages are specially designed to house the chicks to get maximum output from them, they should be treated as plant utilised in the assessee’s business. According to him, earlier, farmers were using range method and deep litter methods for constructing sheds to accommodate chicks. Later, after the scientific development and technology of rearing chicks, the cage system has been introduced. On the basis of this method it is stated the birds are allowed to live in a restricted space so that there can be better output and maximum utility of the bird. The disease control is also better. It is stated that there are different types of cages like brooder cages, grower cages and layer cages. The scientific studies, it is stated, has shown that the output is higher when they are housed in such cages. Certain copies of technical publications by name Deejay Technical Bulletin have also been filed to support the assessee’s claim. Photographs of the cages used in the assessee’s business are also produced before us. The departmental representative, on the other hand, contends that cages are nothing but contraptions to keep the birds and they are nothing different from cattle shed where cattle are kept or cages used to keep the animals in zoos. The departmental representative submitted that they fall more under the description of sheds and buildings rather than plant and machinery. He, accordingly, contends that the lower authorities are correct in not treating the cages as plant and machinery.
3. In our opinion, there is”substance in the assessee’s claim. The word ‘plant’ used in the Income-tax Act, 1961 (‘the Act’) should be given a very wide meaning. The definition of the word ‘plant’ under Section 43(3) of the Act is only an inclusive one and not an exhaustive one. In Webster Dictionary the meaning of plant is given as under :
The machinery, apparatus, fixtures, etc., employed in carrying on a trade or a mechanical or other industrial business; an electric-light plant, a fishing plant, etc. In the commercial sense, a plant may include real estate and all else that represents capital invested in the means of carrying on a business, exclusive of the raw material or the manufactured product.
The Supreme Court had occasion to go into the question as to the content of the word ‘plant’ in CIT v. Taj Mahal Hotel [1971] 82 ITR 44. In the course of that judgment the Supreme Court referred to the meaning of the word ‘plant’ and held that the sanitary and pipeline fittings would fall within the scope of the expression ‘plant’. The Supreme Court held as follows :
Now it is well-settled that where the definition of a word has not been given, it must be construed in its popular sense if it is a word of everyday use; Popular sense means ‘that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it’. In the present case, Section 10(5) enlarges the definition of the word ‘plant’ by including in it the words which have already been mentioned before. The very fact that even books have been included shows that the meaning intended to be given to ‘plant’ is wide. The word ‘includes’ is often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation Clause declares that they shall include….(p. 47)
In the case of Jarrold (H.M. Inspector of Taxes) v. John Good and Sons Ltd. 40 TC 681 (CA) movable partitions were held as plant. In CIT v. Union Bank of India [1976] 102 ITR 270 (Bom.) safe deposit vaults installed in a bank were considered as plant on which development rebate will be allowable, Even the fencing in the oil refinery has come within the scope of the word ‘plant’ in CIT v. Caltex Oil Refining (1) Ltd. [1976] 102 ITR 260 (Bom.). Considering the wide meaning that is given to the word ‘plant’ we have no doubt in our mind, that the cages which are used in the assessee’s business for housing the birds in order to get better output from them, will fall within the scope of the word ‘plant’. Whether the assessee will be eligible for investment allowance or not, will depend on the facts whether the various conditions under Section 32A of the Act have been satisfied or not. As this has not been gone into either by the ITO or by the Commissioner (Appeals), we remit back the matter to the ITO to decide the issue of allowability or otherwise of investment allowance, after considering the cages installed by the assessee for rearing the birds as ‘plant’.
4. The next ground in the appeal is that the Commissioner (Appeals) erred in holding that the higher depreciation applicable to Class III factory buildings should not be allowed on the poultry farm building, belonging to the appellant. While deciding this issue the Commissioner (Appeals) followed his order for the earlier year 1982-83. For that year, it was held by the Tribunal that the building in which the poultry business was carried on by the assessee cannot be classified as factory building. Accordingly, the claim was rejected. Following respectfully the decision of the Tribunal for the assessment year 1982-83 in IT Appeal No. 2056 (Mad.) of 1984, we uphold the action of the lower authorities in rejecting the assessee’s claim.
5. In the result, the appeal is partly allowed.