Case: Commissioner of Trade Tax, U.P Vs. Bhushan Steel And Strips Ltd

transformers for running of the factory are concerned. 12. In the case of Kajaria Ceramics Ltd. (supra), this Court specifically dealt with the issue whether preoperative expenses in the form of payment of interest to the financial institution would form preoperative expenses as part of the "fixed capital investment". The Court, after noticing the meaning of the expression "fixed capital investment", has come to the conclusion that the legislature has consciously used the expression "means" immediately after the expression "fixed capital investment" to imply and ensure that the definition is exhaustive. Further, the Court has observed that the language employed by the legislature while defining the meaning of the expression "fixed capital investment" is unambiguous and therefore, no inclusion can be made in the definition by means of interpretation. In the words of the Court: "61. The respondent had claimed preoperative expenses as part of the fixed capital investment which included interest to financial institutions, rights shares issue expenses, foreign technician expenses and foreign travel expenses. The Tribunal allowed the claim relying on Challapalli Sugars Ltd. v. Commissioner Income Tax (1975) 98 ITR 167 , Commissioner of Income Tax v. Motor Industries Co. Ltd., (1988) 173 ITR 374 and Commissioner Income Tax v. Polychem Ltd. : 1975 98 ITR 574 on the ground that the expenses were necessary to undertake the expansion scheme. The view was affirmed by the High Court, in our opinion, wrongly.62. We have already noted in connection with Issue I that Explanation 4 to section 4A has defined fixed capital investment saying that it "means "investment in land and building and such plant, machinery, equipment apparatus, components, moulds, dyes, jigs and fixtures as have not been used or acquired for use in any other factory or workshop in India".63. The language of the definition of the phrase in Explanation (4) to Section 4A is sufficiently clear and unambiguous. This coupled with the use of the word "means" in the Explanation shows that the definition is exhaustive. As has been observed in Feroze N. Dotiwala v. P. M. Wadhwani (2003) 1 SCC 433 , 442 (SCC paras 13- 14:"Generally, when the definition of a word begins with "means" it is indicative of the fact that the meaning of the word has been restricted; that is to say, it would not mean anything else but what has been indicated in the definition itself.* * *Therefore, unless there is any vagueness of ambiguity, no occasion will arise to interpret the term in a manner which may add something to the meaning of the word which ordinarily does not so mean by the definition itself, more particularly, where it is a restrictive definition."64. According to the Constitution Bench in PLD Corporation Ltd., v. Presiding Officer, Labour Court [1990] 3 SCR 111 ,(SCR at p. 150) when the statute says that a word or phrase shall mean certain things it is a "....hard and fast definition, and no other meaning can be assigned to the expression than is put down.... A definition is an explicit statement of the full connotation of a term". (SCC p.717, para 72)65. Therefore apart from the actual investment in or cost of the specific items of land, building, plant, machinery, equipment apparatus, components moulds dyes, jigs and fixtures, no other item of expense is includible under the head of fixed capital investment for the purposes of section 4A of the Act." 13. After carefully considering the submissions made by both the learned counsel, we are of the considered view that insofar as the first legal issue raised and canvassed before us by the Revenue is squarely covered by the observations made by this Court in Kajaria Ceramics Ltd.(supra) and therefore, the first question of law requires to be answered in favour of the revenue and against the assessee. Accordingly, that portion of the order wherein the High Court had granted relief to the assessee requires to be set aside.14. Insofar as the second issue is concerned, we have to notice the proviso to explanation (4) of Section 4-A of the Act. Explanation (4) speaks of "fixed capital investment" to mean "investment in land and building and such plant, machinery, equipment apparatus, components, moulds, dyes, jigs and fixtures as have not been used or acquired for use in any other factory or workshop in India". The said proviso need not be noticed by us for the purpose of disposal of this appeal. 15. Sub-clause (b) of explanation (4) of Section 4-A, is as under: "for the purposes of determining value of plants including captive power plant, machinery, equipment, apparatus, components, moulds, dyes, jigs and fixtures only the following shall be taken into account:(i) investment, whether by means of purchase, hire or lease in such plant, equipment, apparatus, components and machinery as is necessary for the establishment or running of the factory or workshop;"(emphasis supplied) 16. In the present case, it is the stand of the assessee that in order to control the fluctuation of the electrical energy for running the factory the assessee has purchased the transformer and therefore, the transformer would certainly fall within the meaning of the expression "plant and equipment" essential for effective functioning of the factory.17. It is not in dispute that the appellant has purchased the aforesaid machinery. The said machinery is used by the respondent for the purpose of controlling the fluctuation in the supply of electrical energy to the machinery/equipment installed in the factory premises. Sub-clause (i) of explanation 4(b) of Section 4-A speaks of investment made on machinery/apparatus, components etc. for establishment or running of the factory would fall within the meaning of the expression "fixed capital investment". If that is so, the investment that is made by the assessee would certainly fall within sub-clause(i) of explanation (4)(b) of Section 4-A of the Act. In that view of the matter, we cannot take exception to the judgment and order passed by the High Court where the High Court has appropriately considered the issue and granted relief to the assessee/respondent.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]13. After carefully considering the submissions made by both the learned counsel, we are of the considered view that insofar as the first legal issue raised and canvassed before us by the Revenue is squarely covered by the observations made by this Court in Kajaria Ceramics Ltd.(supra) and therefore, the first question of law requires to be answered in favour of the revenue and against the assessee. Accordingly, that portion of the order wherein the High Court had granted relief to the assessee requires to be set aside.14. Insofar as the second issue is concerned, we have to notice the proviso to explanation (4) of Section 4-A of the Act. Explanation (4) speaks of "fixed capital investment" to mean "investment in land and building and such plant, machinery, equipment apparatus, components, moulds, dyes, jigs and fixtures as have not been used or acquired for use in any other factory or workshop in India". The said proviso need not be noticed by us for the purpose of disposal of this appeal.In the present case, it is the stand of the assessee that in order to control the fluctuation of the electrical energy for running the factory the assessee has purchased the transformer and therefore, the transformer would certainly fall within the meaning of the expression "plant and equipment" essential for effective functioning of the factory.17. It is not in dispute that the appellant has purchased the aforesaid machinery. The said machinery is used by the respondent for the purpose of controlling the fluctuation in the supply of electrical energy to the machinery/equipment installed in the factory premises. Sub-clause (i) of explanation 4(b) of Section 4-A speaks of investment made on machinery/apparatus, components etc. for establishment or running of the factory would fall within the meaning of the expression "fixed capital investment". If that is so, the investment that is made by the assessee would certainly fall within sub-clause(i) of explanation (4)(b) of Section 4-A of the Act. In that view of the matter, we cannot take exception to the judgment and order passed by the High Court where the High Court has appropriately considered the issue and granted relief to the assessee/respondent.