Appeal No 1369 of 1968
Appeal from the judgment and order dated August 1 1967 of the Andhra Pradesh High Court in Case Referred No 68 of 1964
section T Desai J Ramanurthi R N Sachthey and B D Sharma for the appellant
M Natesan and K Jayaram for the respondent
The Judgment of the Court was delivered by Grover J
This is an appeal by certificate from the judgment of the Andhra Pradesh High Court in a case referred under section 661 of the Income Tax Act 1922 hereinafter referred to as the Act
The respondent who is the assessee is a registered firm running a hotel at Secunderabad with branches at Sultan Bazar and King Kothi in Hyderabad
During the previous year ending 30th September 1959 relating to the assessment year 1960 61 the assessee incurred an expenditure of Rs 57154 in installing sanitary fittings and of Rs 1370 for pipe line fittings
The assessee claimed development rebate on these two items at the rate of 25 per cent under section 102vi b of the Act amounting in the aggregate to Rs 14629 
The Income Tax Officer disallowed the claim
On appeal the Appellate Assistant Commissioner upheld the disallowance
An appeal was taken to the Appellate Tribunal
The Tribunal rejected the appeal holding that the definition of plant must necessarily be the same whether it was for claiming depreciation under section 102vi or for development rebate under section 102vi b
Accordingly it was held that the sanitary and pipe line fittings did not fall within the meaning of the word plant
On being moved under section 661 of 170 the Act the following question was referred for the opinion of the High Court  Whether the sanitary fittings and pipelines installed in the King Kothi branch of the Hotel constituted plant  within the meaning of sec
105 of the Indian Income tax Act and whether the assessee is entitled to develop ment rebate in respect thereof under sec
102 of the Act The High Court answered the question in the affirmative and in favour of the assessee
The only question that was argued before the High Court and which has been debated before us is whether sanitary and pipe line fittings in a building which is run as a hotel would fall within the meaning of the word plant in section 102vi b of the Act
Section 101 of the Act provides that tax shall be payable by an assessee in respect of the profits and gains of any business profession or vocation
Sub section 2 gives the allowances which have to be made in computation of such profits and gains
Clause vi of that sub section relates to the depreciation in respect of such buildings machinery plant or furniture being the property of the asses see
Clause vi b of section 102 is as follows vi b in respect of a new ship acquired or new machinery or plant installed after the 31st day of March 1954 which is wholly used for the purposes of that business carried on by the assessee a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant equivalent to  
Section 105 provides inter alia that in sub section 2  plant includes vehicles books scientific apparatus and surgical equipment purchased for the purpose of the business profession or vocation
171 The main argument of the learned counsel for the Commissioner of Income Tax who is the appellant is that the word plant should not have been given a wide meaning and should have been interpreted according to the common understanding in commercial circles among persons who deal in plant and machinery
It is asserted that the development rebate cannot be claimed in respect of the items which have become a part of the building itself
It has also been pointed out that the assessee while claiming depreciation allowance has included the assets in question under the head furniture and fittings the rate claimed being 9 per cent which was duly allowed by the Income Tax Officer
This rate of 9 per cent was applicable under Rule 8 only to furniture and fittings used in hotels etc
If the assets were to be treated as plant only the general rate of 7 per cent would be applicable
The definition of plant must necessarily therefore be the same whether it be for claiming depreciation under section 102vi or for development rebate under section 102vi b
It has also been suggested that the primary meaning of the word plant has connection with mechanical or industrial business or manufacture of finis hed goods from raw goods and that sanitary and pipe line fittings could not possibly satisfy those conditions
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 every day 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 105 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
The word include is also susceptible of other constructions which it is unnecessary to go into
172 The case J Lyons and Company Limited vs Attorney General 1 relied upon by the learned counsel for the appellant apart from being distinguishable hardly supports the contention of the appellant
In that case it was I held that electric lamps and fittings in a tea shop were not part of the apparatus used for carrying on the business but were part of the setting in which the business was carried on and therefore were not plant within the meaning of certain provisions of the War Damage Act 1943
It was observed at page 286 if these articles are plant it can only be by reason that they are found on premises exclusively devoted to trade purposes
Trade plant alone need be considered  The meaning of plant as given in Yar mouth vs France 2 was accepted as correct
According to that meaning plant includes whatever apparatus or instruments are used by a businessman in carrying on his business
In our judgment the more apposite decision is that of the Court of Appeal in Jarrold Inspector of Taxes vs John Good  Sons Ltd 3 There the nature of the assessee s business required that its office accommodation should be capable  of sub division into a number of rooms varying in size etc
according to the requirements from time to time of the agencies which it carried on
The office accommodation consisted of a large open floor space in which partitions could be erected so as to subdivide the floor space into a number of rooms of any size
Certain partitions were made which were screwed to the floor and ceiling only and could be easily moved if it was desired to alter the size of number of the rooms
The question was whether these partitions were plant within sections 279 and 280 of the English Income Tax Act 1952 so as to entitle the company to allowances under those sections
There the material words in the statute were where the person carrying on a trade in any year of assessment has incurred expenditure on the provision of machinery or plant for the purposes of the trade
 It was held that the partitions were plant as they were used in the carrying out of the company s trade or business
Donovan LJ held that the partitions were used to enable the trader to cope with the vicissitudes of 1 1
2 3 173 the business as it increased and diminished and relied on the finding of the commissioners that the flexibility of accommodation which the partitions provided was a commercial necessity for the company
Further illustrations were given of assets which would fall within the meaning of plant
The heating installation of a building may be passive in the sense that it involves no moving machinery but few would deny it the name of plant
The same thing could no doubt be said of many air conditioning and water softening installations
It cannot be denied that the business of hotelier is carried on by adapting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay and where there is arrangement for meals and other amenities are provided for their comfort and convenience
To have sanitary fittings etc
in a bath room is one of the essential amenities or conveniences which are normally provided in any good hotel in the present times
If the partitions in Jarrold s case supra could be treated as having been used for the purpose of the business of the trader it is incomprehensible how sanitary fittings can be said to have no connection with the business of the hotlier
He can reasonably expect to get more custom and earn larger profit by charging higher rates for the use of rooms if the bath rooms have sanitary fittings and similar amenities
We are unable to see how the sanitary fittings in the bath rooms in a hotel will not be plant within s102vi b read with Section 105 when it is quite clear that the intention of the Legislature was to give it a wide meaning and that is why articles like books and surgical instruments were expressly included in the definition of plant
In decided cases the High Courts have rightly understood the meaning of the term Plant in a wide sense
See Commissioner of  Income tax UP vs Indian Turpentine and Rosin Co Ltd
1 If the dictionary meaning of the word plant were to be taken into consideration on the principle that the literal construction of a statue must be adhered to unless the context renders it plain that such a construction cannot be put on the words in question this is what is stated in Webster s Third New International Dictionary 1 17 4 Land buildings machinery apparatus and fixtures employed in carrying on trade or other industrial business
It is however unnecessary to dwell more on the dictionary meaning because looking to the provisions of Act we are satisfied that the assets in question were required by the nature of the hotel business which the assessee was carrying on
They were not merely a part of the setting in which hotel business was being carried on
The High Court was right in not accepting the reasoning of the Tribunal based on the rates relating to depreciation under s102vi and the assessee having claimed that the sanitary and pipe line fittings fell within the meaning of furniture and fittings  in Rule 82 of the Rules
It has been rightly observed that the Rules were meant only for the purpose of carrying out the provisions of the Act and they could not take away what was conferred by the Act or whittle down its effect
If the assessee had claimed higher depreciation allowance that would not detract from the meaning of the word plant in clause vi b of section 102
In the result this appeal fails and it is dismissed with costs
VPS Appeal Dismissed


Summary:
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 section 102vi b of the Income tax Act 1922 and the assessee 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 section 102vi b read with section 105
173H 174A B In computing the profits and gains of a business under section 101 o the Act allowances by way of depreciation in respect of plant  under section 102vi and by way of development rebate in respect of plant  under section 102vi b have to be made
Under section 105 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 these things 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
170E H 171E H 173F 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 higher rates
Therefore the fittings in the present case were not merely a part of the setting in which the hotel business was being carried on but were required for the purpose of the hotel business
173C G CIT UP vs Indian Turpentine and Rosin Co Ltd 1 970  approved
Jarrold Inspector of Taxes vs John Good  Sons Ltd  applied
169 J Lyons Co Ltd vs Attorney General and Yar mouth vs France  referred to
2 The fact that the assessee while claiming depreciation allowance had included the fittings in question under the head furniture and fittings  and claimed higher depreciation allowance than what would be applicable to plant  would not detract from the meaning of the word plant  in section 102vi b
174C E