JUDGMENT
1. The following questions have been referred to this court for decision :
"(i) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the structural steel and tubular structure fall within the definition of 'plant and machinery' ?
(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to depreciation at 30 per cent, on the structural steel and tubular structure ?"
The assessee has been held to be manufacturer. The Tribunal has recorded the following finding :
"We have considered the facts and the rival submissions. The facts mentioned above speak for themselves. The assessee manufactures a highly technical product. Its raw material is cement and iron. The product is manufactured with the aid of plant and machinery, labour and capital. The product is utilised in the manufacture of dams, etc., for controlling and for diverting flow of water. Considering the nature of the activity and the various decisions which have been referred to above, we hold that the assessee was carrying on an industrial undertaking. There is no dispute that looking to the amount of capital involved, the undertaking of the assessee was a small-scale undertaking. We, therefore, hold that the assessee is entitled to initial depreciation on structural steel and tubular structure of the value of Rs. 1,18,000 which was owned by the assessee and was undoubtedly a part of the plant and machinery. The learned Commissioner's view that it could not be considered as a plant obviously cannot be accepted in view of the facts stated above and also the wide definition of this term in Section 43(3) of the Income-tax Act, 1961."
It is not necessary that the manufacturer itself would sell the manufactured goods. The manufacturer may utilise it for construction of dams or for other purposes. Once a person manufactures any goods involving use of plant and machinery, capital and labour, he will be treated as a manufacturer and then it will be a case covered under Section 43 of the Income-tax Act.
On the facts of the case, we answer the questions referred to above in favour of the assessee and against the Department.
The reference is accordingly disposed of.