Commissioner of Income Tax vs M.M. Palanisami Nadar and Sons

Ismail, J.—These petitions have been preferred by the Commissioner of Income Tax, Tamil Nadu-IV, Madras, u/s 256(2),of the Income-

tax Act, 1961, for a direction to the Tribunal to refer the following questions of law said to arise out of the order of the Tribunal to this court for

decision.

(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the buildings used by the assessee

for sundry repairs, etc., are factory buildings for the purposes of computing depreciation ?

(2) Whether the Appellate Tribunal''s interpretation of the word ''factory'' occurring in the Income Tax Rules is sustainable in law ?

(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the workshop maintained by the

assessee could constitute a '' factory building'' and the assessee was entitled to double the rate of depreciation admissible to a factory building?

There are no controversies about the facts. The assessee operates a fleet of motor omnibuses. The fixed assets used in its business include a

building (with which alone we are concerned) wherein minor body-building work, repairs and other maintenance jobs on its vehicles are carried

out for which purposes equipment such as air-compressors, electric welders, battery charger, electric grinders and electric drills are installed in the

said building. It is not disputed that the said workshop has been registered under the Factories Act, 1948. It employs more than ten workers and

uses motor driven power. Under these circumstances, the question for consideration is whether the said workshop can be said to be a ""factory

building"" as contemplated by Appendix (1), Part I, to the Income Tax Rules, 1962. It is admitted that the expression "" factory building "" has not

been defined either in the Act or in the Rules. Under the circumstances, the Appellate Assistant Commissioner as well as the Tribunal having regard

to the admitted facts stated above took the ordinary natural dictionary meaning of the word ""factory"" and held that the workshop of the assessee

herein would constitute a ""factory building"" in the context of the business carried on by the assessee as contemplated by the Income Tax Rules,

1962. We are unable to hold that in the absence of any definition of the term ""factory building"" in the Act or the Rules, the Tribunal committed an

error of law in taking the dictionary meaning of the word and applying the same to the workshop in question. Hence, no question of law arises out

of the order of the Tribunal to be referred to this court for decision and accordingly the petitions are dismissed, with costs, one set. Counsel''s fee

is Rs. 150.