9911796707
TMI Blog1981 (10) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated27-8-1979: "Development rebate - In its revised return the company has claimed development rebate, amounting to Rs. 12,94,254. The details in respect of the above claim have been furnished as under:--- Rs. Plant and Machinery 43,90,186 Cost of cylinders 40,82,383 Elect. Installations 1,55,790 ----------------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 6,462 ii. Cranes 64,767 iii. Cylinders for which order was placed on16-01-1975 4,65,706 iv. Elect. Installations for which no evidence for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as inadvertently allowed on some of the plant and machinery purchased beyond the date till it was allowable under section 33 of the Act. According to the ITO, the assessee would be entitled to development rebate on the cost of cylinders as per cylinder account filed by it and installed up to30-5-1975, amounting to Rs. 19,98,471 only. But that, however, actually development rebate was allowed on an amount of Rs. 36,16,676. The ITO, therefore, held that excessive development rebate was allowed on the cost of cylinders, amounting to Rs. 16,18,206, which were installed after30-5-1975and that such excessive development rebate allowed at 15 per cent on the abovementioned amount of Rs. 16,18,206, amounted to Rs. 2,42,730. Therefore, he called upon the assessee to show cause against the rectification of this mistake. 4. The assessee filed its objections in its letter dated12-9-1979. It stated that it had placed its order for all cylinders in August 1973 ; that while 2,000 cylinders were received in the factory before 31-5-1975, the remaining cylinders had also been paid for on 3-4-1975 and had, thus, become the property of the company before 31-5-1975. The assessee-company, therefore, con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee supported this conclusion of his. He, therefore, annulled the order passed by the ITO under section 154. Aggrieved by this order of the Commissioner, the revenue has filed the present appeal to the Tribunal raising the following grounds: "On the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals) is not justified in annulling the order under section 154 dated21-11-1979of the Income-tax Officer, Coy. Cir. VIII,New Delhi, withdrawing development rebate amounting to Rs. 2,49,730, @15 per cent on Rs. 16,18,206, representing plant and machinery installed after31-5-1975." 7. Shri S.D. Kapila, the learned departmental representative, contended that the order of the Commissioner (Appeals) annulling the rectification order passed by the ITO was unsustainable both in law and on facts. He contended that on the facts as found by the Commissioner (Appeals) there could hardly be any dispute, debate or discussion about the admissibility or otherwise of development rebate to the assessee. He pointed out that out of 3,785 gas cylinders imported by the assessee 1,785 gas cylinders had reached the assessee's factory premises only on10-6-1975and12-6-1975wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e done by the assessee and that since they had come into the ownership and possession of the assessee before the relevant due date, namely, 31-5-1975, these cylinders should be regarded as having been installed in the assessee's business to be eligible for allowance of development rebate under section 33. He also relied on the various decisions cited by him and referred to by the Commissioner (Appeals) in his order. He, therefore, submitted that the order of the Commissioner was right and that the same should be upheld. 9. We have carefully considered the submissions urged on both sides and looked into the materials placed before us. There is no dispute that the assessee's claim for allowance of development rebate is based on section 16(c) of the Finance Act, 1974, which is quoted below : "16. Continuance of development rebate in certain cases.---The notification of the Government of India in the Ministry of Finance (Department of Revenue and Insurance) No. SO 2167, dated the 28th day of May, 1971, issued under sub-section (5) of section 33 of the Income-tax Act shall not apply in respect of--- (a) & (b) (c) any machinery or plant [not being machinery or plant referred to in cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls Ltd. [1959] 36 ITR 580, the expression 'installed' did not necessarily mean 'fixed in position' but was also used in the sense of 'inducted or introduced' ; or to use the language of the Madras High Court in the case of CIT v. Shri Rama Vilas Service (P.) Ltd. [1960] 38 ITR 25, 'installed' would certainly mean to place an apparatus in position for service or use." In view of this authoritative pronouncement of the Supreme Court on the meaning of the word "installed", we find ourselves unable to agree with the learned counsel for the assessee that 1,785 cylinders in question, which were lying atBombaydocks, should be considered as having been installed within the meaning of section 16(c) of the Finance Act, 1974. Till these cylinders reached the factory premises of the assessee at Nagpur they could not be regarded as having been inducted or introduced or to have been placed in a position for service or use in the business of the assessee before 31-5-1975 in order to be eligible for the benefit of development rebate under section 16(c) of the Finance Act, 1974, read with section 33 of the Act. By no stretch of imagination it is possible to hold that these cylinders which were ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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