Law:

Section:

HEADNOTE: During the assessment year 1960-61, the assessee, a registered firm running hotels, incurred expenditure in installing sanitary and pipeline fittings in its hotels. On the question whether such fittings in a building run as a hotel fell within the meaning of the word 'plant' in s.10(2)(vi-b) of the Income-tax Act, 1922, and the assesse was therefore entitled to development rebate under that sub-section, the High Court, in reference, answered in favour of the assessee. Dismissing the appeal to this Court, HELD: (1) Apart from the dictionary or literal meaning of the word 'plant', the context of the provisions of the Act shows that sanitary and pipe line fittings are 'plant' under s. 10(2)(vi-b) read with s. 10(5). (2) In computing the profits and gains of a business under s.10(1) o the Act allowances by way of depreciation in respect of 'plant' under s. 10(2)(vi) and by way of development rebate in respect of 'plant' under s. 10(2)(vi-b) have to be made. Under s. 10(5), 'plant' includes vehicles, books, scientific apparatus and surgical equipment purchased for the purpose of the business profession or vocation. Where a word is not defined in a statute, it must be construed in its popular sense, that is, that sense which people conversant with the subject-matter with which the statute is dealing, would attribute to it. The word 'includes' is generally used to enlarge the meaning of words or phrases used in the statute so that, words and phrases may be construed as comprehending not only such things as they signify according to their nature and import, but also the settings which the interpretation clause declares that they shall include. The fact that even books have been included in 'plant' shows that the meaning given to 'plant' is wide. It should cover sanitary and pipe-line fittings. (3) To have such fittings in a bath room is one of the essential amenities or conveniences which are normally provided in any good hotel, and the hotelier can reasonably expect to get more custom and earn a larger profit by charging high errates. Therefore, the fittings in the present case, were not merely a part of the setting in which the hotel business was being…

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