High Court Of Madras
CIT vs. Essar Bulk Carriers Ltd.
Sections 32A, 80J
Asst. Year 1977-78, 1978-79
R. Jayasimha Babu & A.K. Rajan, JJ.
Tax Case Nos. 955 to 958 of 1990
7th November, 2001
Counsel Appeared : Mrs. Chitra Venkataraman, for the Revenue : P.P.S. Janardhanaraja, for the Assessee
JUDGMENT
A.K. RAJAN, J. :
The questions that are referred to us in respect of the asst yrs. 1977-78 and 1978-89 are :
“1. Whether the Tribunal was correct in law in holding that the dredgers were ships and hence the value of the dredgers should be included in the computation of capital base for working out of the relief under s. 80J?
2. Whether the Tribunal was correct in law in holding that the dredgers were ships and hence the investment allowance should be given in respect of the dredgers?”
2. “Ship” is not defined in the Act. However, in Appendix I to the rules which is the table of rates at which depreciation is admissible, “ship” is defined to include dredgers. The Supreme Court in the case of CIT vs. Digvijay Cement Co. Ltd. (1998) 150 CTR (SC) 206 : (1998) 232 ITR 709 (SC) : TC S28.2910 has held that having regard to the width of the meaning given to the word “ships” in the depreciation table of the IT Rules, 1962, an expanded meaning has to be given to “ships” and pontoons and tugs are ships and are entitled to the higher development rebate of 40 per cent. A “ship” for depreciation and development rebate would be “ship” for investment allowance as well. The questions referred are answered against the Revenue and in favour of the assessee.
[Citation : 256 ITR 251]
