The meaning of equipment item 7 under section fifth schedule of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of equipment item 7.
Meaning of equipment item 7 defined by court
The phrase ‘meaning of equipment item 7’ used in section fifth schedule of the Income Tax Act came up before hon’ble allahabad high court in R.S.G. Conduits & Tubes (P.) Ltd. vs. CIT  127 ITR 83 (all.) and it explained.
Meaning : In common parlance any article which would be required for effectively transmitting electrical energy from one place to another would be considered to be an equipment for the transmission of electricity even though the medium through which the electricity flows or is transmitted is an equipment required for the transmission of energy but it does not mean that the expression is confined only to such medium.
Any article through which the electrical energy does not flow but which is used to secure the medium through which the electricity actually flows in such a way that the medium may be properly used for the transmission of electricity, would also be an equipment for the transmission of electricity. There is no reason to think that the word ‘equipment’ for the transmission of electricity in item no. 7 Of schedule v has been used in a sense other than the popular sense mentioned above.
Fifth schedule of Income Tax Act
(1) Iron and steel (metal), ferro-alloys and special steels.
(2) Aluminium, copper, lead and zinc (metals).
(3) Coal, lignite, iron ore, bauxite, manganese ore, dolomite, limestone, magnesite and mineral oil.
(4) Industrial machinery specified under the heading “8. Industrial machinery”, sub-heading “A. Major items of specialised equipment used in specific industries”, of the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951).
(5) Boilers and steam generating plants, steam engines and turbines and internal combustion engines.
(6) Flame and drip proof motors.
(7) Equipment for the generation and transmission of electricity including transformers, cables and transmission towers.
(8) Machine tools and precision tools (including their attachments and accessories, cutting tools and small tools), dies and jigs.
(9) Tractors, earth-moving machinery and agricultural implements.
(10) Motor trucks and buses.
(11) Steel castings and forgings and malleable iron and steel castings.
(12) Cement and refractories.
(13) Fertilisers, namely, ammonium sulphate, ammonium sulphate nitrate (double salt), ammonium nitrate, calcium ammonium nitrate (nitrolime stone), ammonium chloride, superphosphate, urea and complex fertilisers of synthetic origin containing both nitrogen and phosphorus, such as ammonium phosphates, ammonium sulphate phosphate and ammo-nium nitro phosphate.
(14) Soda ash.
(16) Paper and pulp including newsprint.
(17) Electronic equipment, namely, radar equipment, computers, electronic accounting and business machines, electronic communication equipment, electronic control instruments and basic components, such as valves, transistors, resistors, condensers, coils, magnetic materials and microwave components.
(18) Petrochemicals including corresponding products manufactured from other basic raw materials like calcium carbide, ethyl alcohol or hydrocarbons from other sources.
(20) Automobile ancillaries.
(21) Seamless tubes.
(23) Ball, roller and tapered bearings.
(24) Component parts of the articles mentioned in item Nos. (4), (5), (7) and (9), that is to say, such parts as are essential for the working of the machinery referred to in the items aforesaid and have been given for that purpose some special shape or quality which would not be essential for their use for any other purpose and are in complete finished form and ready for fitment.
(25) Cotton seed oil.
(27) Printing machinery.
(28) Processed seeds.
(29) Processed concentrates for cattle and poultry feed.
(30) Processed (including frozen) fish and fish products.
(31) Vegetable oils and oil-cakes manufactured by the solvent extraction process from seeds other than cotton seed.
(32) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of cotton, including cotton yarn, hosiery and rope.
(33) Textiles (including those dyed, printed or otherwise processed) made wholly or mainly of jute, including jute twine and jute rope.
In this article, you can get guidance from high courts on the meaning of meaning of equipment item 7 under fifth schedule of the Income Tax Act.
Updated up to Finance Act 2021