The word "machinery" in S. 10(2) (vi) and S. 10(2) (via) of the Income Tax Act should be given the same meaning. A diesel engine is "machinery" within the meaning of the Act. The replacement of a petrol engine with a diesel engine in a motor vehicle is "installation of machinery" within the meaning of the Act.

Judgment

SIKRI, J. (For himself and Subba Rao J.) This is an appeal by the Commissioner of Income Tax, Madras, against the judgment of the High Court, dated november 16, 1959, on a certificate granted by the High Court under S. 66A (2) of the Indian Income Tax Act, 1922.

2. The respondent, Mir Mohd. Ali hereinafter referred to as the assessee, is a bus owner and transport operator at Vellore, North Arcot District. He had a fleet of buses, and during the year of account ending with March 31, 1950 (relevant to assessment year (1950-51) he replaced the petrol engines in two of his buses (MDJ 583 and MDJ 723) by new Diesel engines, incurring an expenditure of Rs. 18,544/- in this connection. Before the Income Tax Officer, apart from claiming normal depreciation under the first Paragraph of cl. (vi) of S. 10(2), he also claimed depreciation under the second paragraph of cls. (vi) and cl. (via) of the Indian Income-tax Act, 1922. The Income Tax Officer only allowed 25 per cent depreciation under the first paragraph of cl. (vi). The assessee appealed unsuccessfully to the Appellate Assistant Commissioner on this point. There were other points involved in the appeal but as we are not concerned with them in this appeal, they are not being mentioned. On further appeal, the Appellate Tribunal held that

"the assessee is not entitled to extra depreciation under S. 10(2) (vi) or S. 10 (2) (via) because however important the engine might be for running of a motor, it is after all part of an equipment and it cannot by itself become "machinery" for the purpose of claiming extra depreciation, as envisaged in these sub-sections. We have to hold that the installation of the new engines is only a capital addition, for the above reasons the assessee was rightly refused the extra depreciation he claims."

The Income Tax Appellate Tribunal, on the application of the assessee, referred the following question to the High Court:

"Whether extra depreciation is admissible under the provisions of section 10(2) (via) of the Income Tax Act, in respect of a diesel oil engine fitted to a motor vehicle in replacement of the existing engine."

We may mention that another question regarding disallowance of interest had also been referred to the High Court but we are not concerned with that in the present appeal.

3. As the High Court felt that there had been an accidental slip in framing the question, it amended the question and the amended question reads :

"Whether extra depreciation is admissible under the provisions of S. 10(2) (vi) and section 10(2)(via) of the Income Tax Act in respect of the diesel oil engines fitted to the motor vehicles in replacement of the existing engines."

4. The High Court answered this question in the affirmative, i.e., in favour of the assessee. The commissioner of Income Tax, on obtaining a certificate under S. 66A(2) of the Income Tax Act, has filed this appeal.

5. Before attempting to answer the question, it is necessary to set out the relevant provisions of the Income Tax Act. The relevant provisions, as in force at the relevant time, were:

"Section 10(2). Such profits or gains shall be computed after making the following allowances, namely:

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(iv) in respect of insurance against risk of damage or destruction of buildings, machinry, plant, furniture, stocks or stores, used for the pruposes of the business, profession or vocation, the amount of any premium paid;

(v) in respect of current repairs to such buildings, machinery, plant or furniture, the amount paid on account thereof;

(vi) in respect of depreciation of such buildings, machinery, plant, or furniture being the property of the assessee, a sum equivalent where the assets are ships other than ships ordinarily plying on inland waters to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed and in any other case, to such percentage on the written down value there of as may