JUDGEMENT (Per Mrs. Sujata Manohar, J.) Income-tax Reference No. 580 of 1976 deals with the assessment year 1966-67 while Income-tax Reference No. 586 of 1976 deals with the assessment years 1971-72 and 1972-73. These assessments pertain to the assessee M/s. Advani Oerlikon Pvt. Ltd. During the relevant previous years for these three assessment years the assessee was engaged in the business, inter alia, of manufacture and sale of welding electrodes. It was the contention of the assessee for the assessment year 1966-67 that in respect of manufacture of these electrodes it was entitled to relief under sec. 80E as it then stood, because it was priority industry as per that section. This claim of the assessee has been negatived by the taxing authorities right upto the Tribunal. For the other two assessment years the relevant section under which the assessee has claimed relief as a priority industry is section 80-I. The assessee also claimed development rebate at the rate of 35% instead of 20% on the ground that its plant and machinery are used in the manufacture of items set out in the 5th Schedule to the Income-tax Act, 1961. The assessee relied upon section 33(1)(b)(B) in this connection. This claim of the assessee has also been negatived by the taxing Authorities. The assessee has been granted development rebate at the rate of 20% only. Hence the following questions have been referred to us for determination under section 256(I) of the Income-tax Act, 1961 : Income-tax Ref. No. 580/76 : 1. Whether, on the facts and in the circumstances of the case, the assessee carries on the business of manufacture or production of one or more of the articles specified in the 5th Schedule to the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee will be entitled to deduction under section 80-E of the Income-tax Act, 1961 in respect of its profits and gains attributable to the manufacture of electrodes ? Income-tax Ref. No. 586/76 : 1. Whether, on the facts and circumstances of the case, the assessee is entitled to development rebate at the rate of 35% on the actual cost of machinery or plant installed for the manufacture of Electrodes ? 2. Income-tax Ref. No. 586/76 : 1. Whether, on the facts and circumstances of the case, the assessee is entitled to development rebate at the rate of 35% on the actual cost of machinery or plant installed for the manufacture of Electrodes ? 2. Whether on the facts and in the circumstances of the case, the assessee carries on the business, manufacture or production of one or more of the article specified in the 5th/6th Schedule to the I.T. Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the gross total income of the assessee includes any profits and gains attributable to any priority industry within the meaning of section 80-I of the I.T. Act of 1961 ? 4. Whether, on the facts and in the circumstances of the case, the assessee will be entitled to deduction under section 80-I of the Income-tax Act of 1961 in respect of its profits and gains attributable to the manufacture of electrodes ? 5. Whether, on the facts and in the circumstances of the case, the assessee is entitled to relief under sec. 80J of the Income-tax Act, 1961, at 6% of borrowed capital of Rs. 26,72,802/- (assessment year 1971-72) and of Rs. 21,78,575/- (assessment year 1972-73) besides the relief already allowed under section 80-J at 6% on the own capital of the company, of Rs. 35,80,927/- (assessment year 1971-72) and of Rs. 42,03,719/- (assessment year 1972-73) ? Old section 80E of the Income-tax Act which was in force during the assessment year 1966-67 is in terms similar to sec. 80I which was in force for the assessment years 1971-72 and 1972-73. We are, therefore, referring only to sec. 80I for the sake of brevity. Under sec. 80I, which was then in force, in the case of company to which this section applies, where the gross total income includes any profits and gains attributable to any priority industry, there shall be allowed a deduction from such profits and gains of an amount as specified in that section. Priority industry is defined under sec. 80-B(7), as, inter alia, the business of manufacture of production of any one or more of the articles or things specified in the 6th Schedule. Priority industry is defined under sec. 80-B(7), as, inter alia, the business of manufacture of production of any one or more of the articles or things specified in the 6th Schedule. The relevant item of the 6th Schedule as then in force, for our purposes is item 8, which is as follows : Item 8 : Machine tools and precision tools (including their attachments and accessories cutting tools and small tolls, dies and jigs). Under the old section 80E also, which was applicable for the assessment year 1966-67, the company whose total income inclusive of profits and gains attributable, inter alia, to the business of manufacture or production of any one or more of the articles or things specified in the 5th Schedule, was entitled to a deduction as specified in that section. The relevant entry in the 5th Schedule is also entry 8, which is identical with the same entry in the 6th Schedule. We have, therefore, to consider whether the business of manufacture of welding electrodes can be considered as the business of manufacturing any machine tools or their attachment and accessories. A 'tool' is described in Encyclopaedia Britannica, Vol. 22 as "an implement or appliances used by a worker in the treatment of the substances used in his handicraft, whether in the preliminary operations of setting out and measuring the materials, in reducing his work to the required form by cutting or otherwise, in gauging it and testing its accuracy, or in duly securing it while thus being treated". Thus there are tools which can be broadly grouped as tools fur chiseling, for shearing, for scraping, the percussive and detrusive group of tools such as a hammer or a punch and the moulding group of tools such as a trowel. When any such tool is held and operative by a machine it becomes a machine tool. Encyclopaedia Britannica, Volume 14, describes 'machine tools'. "Machine tools are often defined as power-driven machines ordinarily not portable by hand which cut, shear or press metal into desired forms." In Webster's Third New International Dictionary, 1966, Vol. II, page 2408, 'Tool' is defined as an instrument (as hammer or saw) used or worked by hand; an implement or object used in performing an operation or carrying on work of any kind. II, page 2408, 'Tool' is defined as an instrument (as hammer or saw) used or worked by hand; an implement or object used in performing an operation or carrying on work of any kind. A tool is, therefore, something that serves as a means to an end, an instrument by which something is effected or accomplished. A machine tool carries out such operations with the help of a machine. In the light of this description we have to see whether a welding electrode manufactured by the assessee can be described as a machine tool or as an accessory to a machine tool. (It is accepted by both sides that it is not an attachment to a machine tool). The electrodes manufactured by the assessee consist of a rod of metal which is coated with a material which serves as a fluxing or deoxidizing medium. These rods are fixed to a welding machine. When an electric current passes through the metal rod, the tip of the rod becomes hot and melts to become the weld which holds the material together. Encyclopaedia Britannica, Vol. 23 describes the process of metal arc welding. "An arc is struck between the electrodes, a wire or rod of suitable composition, generally coated with a heavy cellulose or mineral coating, and the parts to be welded. ... The metal is fused at both ends of the arc and the fused electrode deposited in the joint in a series of layers until it is properly filled. An arc welding cut fit consists of a welding generator or transformer, a control panel for varying the current, a voltmeter and ammeter, proper lengths of cable, an electrode holder and a suitable shield or helmet for protecting the eyes of the operator." The electrode gets consumed in the process of welding. Can such an electrode be considered as a machine tool ? A machine tool must be a tool which perform certain operations, such as, cutting, drilling etc. on the material which is sought to be fashioned into something which the manufacturer desires. It is basically a means to an end. In the present case, the electrode does not carry out any such function. It is certainly essential to welding because the electrode melts and becomes a weld which holds the material in question together and therefore it gets consumed in the process of welding. It is basically a means to an end. In the present case, the electrode does not carry out any such function. It is certainly essential to welding because the electrode melts and becomes a weld which holds the material in question together and therefore it gets consumed in the process of welding. Such an item, in our view, cannot be considered as a machine tool. Mr. Mehta, learned advocate for the assessee, drew our attention to a decision in the case of Consolidated Tea and Land Co. (India) Ltd., Calcutta v. Commissioner of Wealth-tax, West Bengal II, reported in (1970) 76 ITR 589 . The Calcutta High Court in that case, inter alia, considered whether electrical machinery, batteries, transmission lines, grinding machinery satisfy the description of "tools and implements" under sec. 5(1)(ix) of the Wealth-tax Act, 1957. The Court said that the language of that section exempts tools and implements used for the raising of agricultural produce and it relied upon a observation in the case of Kanan Devon Hills Produce Co. Ltd. v. Commissioner of Wealth-tax, reported in 67 ITR 823 to the effect that "Tools and implements, which may include modern scientific and mechanised implements like transformers or switch-gear, may quality for exemption, if used for raising agricultural produce." We do not see how this decision has any bearing on the questions before us. In the case of Kanan Devon Hills Produce Co. Ltd. v. Commissioner of Wealth-tax, West Bengal reported in 67 ITR 823 at p. 835, the question was whether the tools and implements used by the assessee in raising agricultural produce would include even plant or machinery or not. We are not concerned with this question at all in the present case. In third decision cited by the assessee viz. Col. H. H. Sir Harindar Singh Brar Bans Bahadur v. Commissioner of Wealth-tax, Punjab, reported in 98 ITR 458, the Punjab and Haryana High Court also considered the same provisions of the Wealth-tax Act. Since item 8 which we have to consider is quite different from this provision of the Wealth-tax Act, we do not see how this decision relied upon by the assessee will have any relevance to the question before us. It is submitted by Mr. Mehta that since the deduction granted under sec. Since item 8 which we have to consider is quite different from this provision of the Wealth-tax Act, we do not see how this decision relied upon by the assessee will have any relevance to the question before us. It is submitted by Mr. Mehta that since the deduction granted under sec. 80I is by way of an encouragement to a priority industry, we must construe the provisions of the section liberally (in this connection 1976 ITR 117). But in the present case, even if we may construe the words "machine tools" liberally, it is difficult for us to come to a conclusion that a welding electrode is a machine tool. The Tribunal, while deciding this question, has relied solely upon the fact that an electrode is an item which gets consumed in the process of welding. The Tribunal has said that a machine tool must have some durability. Since this attribute is not possessed by welding electrode, it cannot be considered as a machine tool. In our view, durability may be a relevant test for considering whether an item is a machine tool or not. But it is not a decisive test. In fact, in a given process it may be possible that a tool used may be good for only one or two operations. It may even be designed specially to carry out only the operation. Durability, therefore, is not necessarily a test which would apply in every case, though, it is certainly one of the tests which may be considered, e.g. dies and moulds which also form a part of item 8 may be such that they can be used only for one operation. What is required to be judged is whether that item in question functions as a tool for the purpose of fashioning the raw material or other items used in the manufacturing process. Mr. Jetley relied upon a decision of the House of Lords in the case of Hinton (Inspector of Taxes) v. Maden and Ireland Ltd., reported in (1960) 39 ITR 357. In that case the House of Lords was required to consider whether knives which were used in the operation of cutting leather for shoes manufactured by the assessee can be considered as a plant. The average life of a knife was from one year to three years, depending upon the type of knife. In that case the House of Lords was required to consider whether knives which were used in the operation of cutting leather for shoes manufactured by the assessee can be considered as a plant. The average life of a knife was from one year to three years, depending upon the type of knife. The Court said that such knives were "plant" within the meaning of sec. 16(3) of the Finance Act, 1954. In considering this question the Court has observed that a plant must have some degree of durability. It would find it difficult to include articles which are quickly consumed or worn out in the course of a few operations in the term 'plant'. The House of Lords considered an average life of one to three years as of sufficient durability for the purpose of including knives in the term 'plant'. This decision and the test of durability on which it relies to some extent, is on the question of interpretation of the term 'plant'. We are not concerned with this question at all. We are concerned with deciding whether a welding electrode is a machine tool. For reasons which we have set out earlier, in our view, an electrode does not perform the functions of a tool. It is not an instrument for welding. It makes and becomes a weld which holds the material together. Its nature and character therefore are more akin to raw material used for welding. In fact, it is not controverted before the Tribunal that the electrodes are consumable items. If we may-use an analogy, the function of a welding electrode may be looked upon as something akin to gum which may be applied to hold two pieces of paper together. The gum is a material used for pasting two pieces of paper together. It is not a tool. A welding electrode which serves a similar purpose is also not a machine tool. In the alternative, it is contended by Mr. Mehta, learned Counsel for the assessee, that a welding electrode may be considered as an accessory of a welding machine, the latter being a machine tool. An 'accessory' is defined in Murray's Oxford English Dictionary as "Coming as an accession, contributing in a additional and hence subordinate degree; something contributing in a subordinate degree to a general result or effect; an adjunct, or accompaniment". An 'accessory' is defined in Murray's Oxford English Dictionary as "Coming as an accession, contributing in a additional and hence subordinate degree; something contributing in a subordinate degree to a general result or effect; an adjunct, or accompaniment". An electrode does not contribute in any additional manner to a welding machine. It is not an aid or an adjunct to a welding machine. It is, in fact, essential for the purpose of welding-essential as it affixes the welding material. In the case of M/s. Annpurna Carbon Industries Co. v. State of Andhra Pradesh reported in AIR 1976 SC 1418 the Supreme Court has cited with approval the definition of "accessories" in Webster's Third New International Dictionary as follows : "an object or device that is not essential in itself but that adds to the beauty, convenience or effectiveness of something else." Other meanings given there are : "supplementary or secondary to something of greater or primary importance". An electrode does not fall within this definition of an "accessory". [In this connection also 47 STC 318 [Commissioner of Sales-tax Maharashtra State, Bombay v. L.D. Bhave and Sons] a judgment to which one of us was a party]. In the case of Deputy Commissioner of Commercial Taxes, Madurai Division, Madurai v. Ravi Auto Stores, reported in [1968] 22 STC 172 the Madras High Court considered the nature of a welding electrode while considering whether it could be classified as electrical goods. A 'welding electrode' has been described by the Madras High Court thus: "These copper rods styled as electrodes are conductors of electricity and electricity is used for the purpose of heating up the pointed ends of the rods in the process of welding so that in the very process the copper rods gradually disappear." This functioning of a welding electrode, in our view, does not classify it either as a machine tool or as an accessory to a machine tool. For the purpose of granting development rebate at the rate of 35% under sec. 33(1)(b)(B) of the Income-tax Act also the business of the assessee, of manufacturing welding electrodes, must be classifiable as a business of manufacture of articles falling under the 5th Schedule, entry 8 as this is the applicable entry according to the assessee. For the purpose of granting development rebate at the rate of 35% under sec. 33(1)(b)(B) of the Income-tax Act also the business of the assessee, of manufacturing welding electrodes, must be classifiable as a business of manufacture of articles falling under the 5th Schedule, entry 8 as this is the applicable entry according to the assessee. In other words, for the claim of development rebate at the rate of 35% also, the business of the assessee must be classifiable as of manufacturing machine tools or its accessories. Since we have held that the assessee's business cannot be so classified, the assessee is not entitled to a development rebate at the rate of 35% in respect of its business of manufacturing welding electrode. In the premises, the questions referred to us are answered as follows : I.T. Ref. No. 580/76 : Question Nos. 1 and 2 are answered in the negative and in favour of the revenue. I.T. Ref. No. 586/76 : Question Nos. 1 to 4 are answered in the negative and in favour of the revenue. As far as question No. 5 is concerned, it is an accepted position on both sides that in view of the decision of the Supreme Court in the case of Lohia Machines Ltd. v. Union of India, reported in 152 ITR 308, question No. 5 must be answered in the negative and in favour of the revenue. Questions are answered accordingly. In the circumstances there will be no order as to costs.