Cit Vs. Agarwal Transformers (P) Ltd. - Court Judgment

Excerpt:
counsels: sandeep bhandawat, for the revenue anjay kothari, for the assessee head note: income tax depreciation--rategenerator set catch note: assessee claimed depreciation on generator set at the rate of 30 per cent on basis of item 10a in appendix-i--assessing officer allowed only 15 per cent depreciation on ground that generator generates electricity and it was different from pumps run on wind energy, which fall within renewable energy devices under item 10a--not justified--it was erroneous to say that condition 'run on wind energy' was also attached to electric generators, condition 'run on wind energy' was only attached to word 'pumps' and not to electric generators and, therefore, generator set falls within item 10a of appendix-i and eligible for depreciation at the rate of 30 per cent. ratio: condition 'run on wind energy' was only attached to word 'pumps' and not to electric generators and, therefore, generator set falls within item 10a of appendix-i and eligible for depreciation at the rate of 30 per cent. held: according to the rules of construction, where two or more words which are susceptible of analogous meaning are coupled together noscitur a sociis, they are understood to be used in their cognate sense. they take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general. thus, the word 'electric generator' must be construed as ejusdem generis. the electric generator by itself generate electricity and, therefore, do not fall within the renewable energy devices. it is different from pumps run on wind energy, which falls within the renewable energy devices. thus, it is erroneous to say that the condition 'run on wind energy' is also attached to electric generators. even grammatically neither, nor the word 'both' is used after the word 'pumps' in the relevant entry and this also clarifies that the condition 'running on' wind 'energy' is only attached to the word 'pumps' and not to the electric generators. a further reading of the entry shows that it is inclusive, it refers to two different items namely, electric generators and secondly the pumps running on wind energy. thus, the electric generator clearly falls under the renewable energy devices and the tribunal has rightly allowed the depreciation at the rate of 30 per cent on the basis of item (10a), clause (xii), of appendix-i of the income tax rules, 1962. application: not to current assessment year. decision: in favour of assessee. income tax act 1961 s.32 in the rajasthan high court n.n. mathur & d.n. joshi, jj. - - thus, in our view the electric generator clearly falls under the renewable energy devices and the tribunal has rightly allowed the depreciation at the rate of 30 per cent on the basis of item (10a), clause (xii), of appendix-i of the income tax rules, 1962. 4. the reference is accordingly answered in favour of the assessee and against the revenue.n.n. mathur, j.the tribunal, jaipur, under section 256(1) of the income tax act has sought opinion of this court on the following question of law :'whether, on the facts and in the circumstances of the case, the tribunal was justified in law in holding that generator set falls within the category defined in clause (xiii) of item 10a of appendix-i of the income tax rules, 1962, and as such is eligible for depreciation at the rate of 30 per cent ?'2. the reference application pertains to the assessment years 1984-85, 1985-86 and 1987-88. the respondent-assessee is a company carrying on the business of re-rolling of stainless steel pattas through hot and cold process. the assessee claimed depreciation on generator set at the rate of 30 per cent on the basis of item 10a in the depreciation schedule in appendix-i. in the opinion of the assessing officer the generator set is not run on wind energy as such it is not covered by item at 10a and as such the higher depreciation was not permissible on that count. the assessing officer however, allowed the depreciation at the normal rate of 15 per cent on the generator set. the commissioner (appeals) confirmed the finding of the assessing officer. however, the tribunal was of the view that the generator being a renewable energy device, the depreciation of 30 per cent was allowable. in order to appreciate the controversy involved, it will be convenient to extract the relevant entry at item no. (xiii) of rule 10a of appendix-i appended to income tax rules, which reads as follows :'any special devices including electric generators and pumps running on wind energy.'3. according to the rules of construction, where two or more words which are susceptible of analogous meaning are coupled together noscitur a sociis, they are understood to be used in their cognate sense. they take, as it were, their colour from each other, the meaning of the more general being restricted to a sense analogous to that of the less general. thus, in our view the word 'electric generator' must be construed as ejusdem generis. the electric generator by itself generate electricity and, therefore, do not fall within the renewable energy devices. it is different from pumps run on wind energy, which falls within the renewable energy devices. thus, it is erroneous to say that the condition 'run on wind energy' is also attached to electric generators. even grammatically neither, nor the word 'both' is used after the word 'pumps' in the relevant entry and this also clarifies that the condition 'running on' wind 'energy' is only attached to the word 'pumps' and not to the electric generators. a further reading of the entry shows that it is inclusive, it refers to two different items namely, electric generators and secondly the pumps running on wind energy. thus, in our view the electric generator clearly falls under the renewable energy devices and the tribunal has rightly allowed the depreciation at the rate of 30 per cent on the basis of item (10a), clause (xii), of appendix-i of the income tax rules, 1962.4. the reference is accordingly answered in favour of the assessee and against the revenue.