K. Shivashankar Bhat, J.The question referred to us under the provisions of the Income Tax Act reads thus :

"Whether, on the facts and in the circumstances of the case, the assessee was entitled to investment allowance on the storage tank "

2. The assessee derives income form manufacture of non-edible oil from groundnut cake and rice-bran. Since the production is primarily oil, a storage tank is absolutely necessary for the purpose of the business of the assess. The assessee constructed a tank with mild steel sheets, which is used for the storage of hexane and the manufactured oil. The assessee claimed investment allowance under the provisions of section 32A of the Income Tax Act, 1961, treating the storage tank as "plant". The Income Tax Officer disallowed this claim. This order was affirmed by the Commissioner of Income Tax (Appeals), who held that a storage tank cannot be treated as "plant" or "machinery". The Appellate Tribunal, however accepted the contention of the assessee in the manufacturing process and as such constitutes "plant". Hence, this reference at the instance of the Revenue.

3. Investment allowance is granted u/s 32A of the in respect of a ship or and aircraft or machinery or plant specified in subsection (2) thereof. However, the words "plant" or "machinery" are not defined in section 32A, while only section 43(3) defines "plant" as including ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of the business or profession. According to learned counsel for the Revenue a "storage tank" cannot be "plant" at all and would not come within the definition of "plant" because the definition of "plant" is an inclusive definition; on the face of it, a storage tank in not a ship, vehicle, book, scientific apparatus or a surgical equipment. Learned counsel urged that the normal meaning of the word "plant" in no way comprehends within it a storage tank, since it does not have any machinery for its operation and functioning. It was further contended that the meaning attributable to the term should fit into the various words stated in section 43(3), analogous to the principle of ejusdem generis.

4. The contention of learned counsel based on the phraseology of section 43(3) and the introduction of the aforesaid principle of interpretation cannot be accepted because we do not find any common quality amongst the various articles stated in section 43(3). The various articles referred to in no way fall within a particular group of things; however, they may be treated as forming a particular category of articles or goods or things which are used for the purpose of business or profession. In other words, whatever is necessary or facilitates the business or profession of an assessee and which can be termed as a means or incidental to the means of the said business or profession, may form one single category. In that sense, the definition of "plant" may be understood.

5. The meaning attributable to a term will have to be understood with reference to the context and the purpose for which a particular provision is enacted. u/s 32A, an assessee is given certain benefits by way of allowance in respect of the investments made by the assessee to earn the income. The allowance granted has a close nexus to the means employed to earn the income which is charged to tax under the. The object is quite obvious. The person who invested to earn the income also should be encouraged by the grant of allowance others also will have to be attracted to earn income which in turn would produce the revenue. Whatever may be the objectives behind section 32A, there can be no doubt that the grant of allowance is closely linked with the subject or the thing employed to earn the income.

6. Since section 32A is a beneficial provision, it should receive a liberal construction to effectuate the basic idea behind the provision. Therefore, there is no reason to restrict the meaning of the term "plant" or "machinery" used in section 32A of the.

7. In Indian Aluminium Co. Ltd. Vs. Commissioner of Income Tax, , one of the questions pertained to the depreciation allowance claimed in respect of the storage tanks by an aluminium factory. Storage tanks were meant to store water which is essential for the production of aluminium. The question which arose under Appendix I of Part I of the Income Tax Rules, 1962, whereunder item No. 11 refers to plant and machinery for the purpose of depreciation. The Calcutta High Court held that the storage tank was "plant" in an aluminium factory.

8. In CHITPORE GOLABARI CO. P. LTD. Vs. COMMISSIONER OF Income Tax WEST BENGAL., , it was held that the term "plant" has a wide meaning and would comprise within its meaning tube-wells also. Mr. Chanderkumar, however, sought to distinguish this decision by pointing out that the tubewell requires mechanical contrivance for its operation and, therefore, it will be part of the phrase "Plant or machinery"

9. The Supreme Court considered the concept of plant in Commissioner of Income Tax, Andhra Pradesh Vs. Taj Mahal Hotel, Secunderabad, . The assessee was a hotel. Sanitary and pipeline fittings were installed in one of its branches. Depreciation allowance was claimed on these investments. The Supreme Court held that sanitary and pipeline fittings fell within the definition of "plant". The Supreme Court also pointed out that the intention of the Legislature was to give the word "plant" a wide meaning. At page 48, the Supreme Court referred to an English case where partitions effected for office accommodation were treated as "plant". The approach adopted by the Supreme Court was to treat an article as plant which was essential or reasonably necessary for the purpose of the assessees business. At page 48, it was observed :

"If the partitions in Jarrolds case [1963] 1 WLR 214 could be treated as having been used for the purpose of the business of the trader, it is incomprehensible how sanitary fittings can be said to have no connection with the business of the hotelier. He can reasonably expect to get more connection with the business of the hotelier. He can reasonably expect to get more custom and earn larger profit by charging higher rates for the use of rooms if the bathrooms have sanitary fitting similar amenities. We are unable to see how the sanitary fittings in the bathrooms in a hotel will not be plant within section 10(2) (vib) read with section 10(5) when it is quite clear that the intention of the Legislature was to give it a wide meaning and that is why articles like books and surgical instruments were expressly included in the definition of "plant". In decided cases, the High Courts have rightly understood the meaning of the term plant in a wide sense".

10. This principle was applied by the Andhra Pradesh High Court in Commissioner of Income Tax Vs. Warner Hindustan Ltd., wherein a well dug for the purpose of carrying on business was treated as "plant". Since the well was dug to meet the needs of the factory, the well was held to be "plant".

11. In the decision of the Calcutta High Court in Commissioner of Income Tax Vs. Hindusthan Motors Ltd., , a tube-well was treated as "plant". It was held that it is an apparatus with equipment necessary for drawing water for the purpose of industrial production and for the labour. These two decisions of the Andhra Pradesh High Court and of the Calcutta High Court indicate that an object or a thing which is beneficial to the carrying on of the business of the assessee to earn taxable income could be treated as "plant". With respect, we entirely agree with this approach.

12. In the instant case, the assessee is carrying on the business of producing oil. A storage tank is absolutely necessary for the activities of the assessee. In these circumstances, the Appellate Tribunal was fully justified in upholding the claim of the assessee and treating the storage tank as "plant".

13. Consequently, the answer to the question referred is in the affirmative an against the Revenue.