C.I.T. ANDHRA PRADESH versus M/S TAJ MAHAL HOTEL, SECUNDERABAD

Citation: [1972] 1 S.C.R. 168 · Decided: 12-08-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed
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Judgment (excerpt)

168 
C.I.T. ANDHRA PRADESH 
v. 
M/S TAJ MAHAL HOTEL, SECUNDERABAD 
August 12, 1971, 
[K. s. HEGDE AND A. N. GROVER, JJ.] 
Income-tax Act (I I of 1922) s. 10(2) (vi) and (vi-b)-'Plant', 
meaning of 
During the assessment year 1960-61, the assessee, a registered firm 
running hotels, 
incurred expenditure in installing sanhary and pipe-
line 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 s. 10(2)(vi-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: (I) 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 s. 10(2)(vi-b) read with s. 10(5). 
[173H; 174A-B] 
Jn computing the profits and gains of a business under s. 10(1) o 
the Act allowances by way of depreciation in respect of 'plant' under 
s. 10(2)(vi) and by way of development rebate in respect of 'plant' under 
s. 10(2)(vi-b) have to be made. Under s. 10(5), '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 thingl; which the interpretation clause declares that tlley 
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] 
C.l.T., U.P. v. Indian Turpentine and Rosin Co. Ltd., (1970) 75 I.T.R. 
533, approved. 
Jarrold (Inspector of Taxes) v. John Good & Sons Ltd., (1963) I 
W.L.R. 214, applied. 
A 
B 
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D 
E 
F 
G 
H 
' 
A 
B 
C.I.T. V. TAJ MAHAL HOTEL (Grover, J.) 
169 
J. Lyons Co. Ltd. v. Attorney General, [ 1944] l Ch. 281 and Yar 
mouth v. France, [1887] 19 Q.B. 647, referred to. 
(2) The fact that the assessee while claiming depreciation allowance 
had inc:uded the fittings in question under the head ··furniture and fittings' 
and claim~d higher depreciation allowance than what would be applicable 
to 'plant', would not detract from the meaning of the word 'plant' in 
" l0(2)(vi-b). [174C-E] 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1368 
of 1968. 
Appeal from the judgment and 
order dated August 
c 
I, 1967 of the Andhra Pradesh High Court in Case Refer-
red No. 68 of 1964. 
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E 
F 
G 
H 
S. T. Desai, J. Ramamurthi, 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 s. 66(1) of the Income Tax Act, 1922 (here-
inafter 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 ex-
penditure of Rs. 57,154/- in installing sanitary fittings 
and of Rs. 1,370/- for pipe-line fittings. 
The assessee 
claimed development rebate on these two 'items at the 
rate of 25 per cent under s. 10(2)(vi-b) of the Act amounting 
in the aggregate to Rs. 14,629/-. The Income Tax Officer 
disallowed the claim. On appeal, the Appellate Assistant 
Commissioner upheld the disallowance. 
An appeal was 
taken to the
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