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TMI Blog1990 (12) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 688 of 100 ITR) : "Whether, in the facts and circumstances of the case, the order of the Tribunal holding that the conditions under section 33(1) of the Income-tax Act are satisfied, is legal and proper?" The appellant-assessee is a registered partnership firm under a deed executed and registered on November 10 . 1958, between Prayagchand Periwal and Hanumanmal Periwal and Messrs. Periwal and Co. P. Ltd. having its business at Purnea in Bihar State. It derives income from the business of cold storage. Messrs. Prayagchand Hanumanmal, a partnership firm, consists of Prayagchand and Hanumanmal Periwal with 50 per cent. share each and started its business with its head office at Calcutta and a branch office at Purnea. It started functioning with effect from May 3, 1956. The branch office at Purnea carried on the business in the name and style of Shri Mahabir Cold Storage. The partners had taken a loan from Periwal and Co. P. Ltd. for erection of a cold storage plant and for its running capital. Later, the company was taken as a partner for better management and financial assistance. Prayagchand and Hanumanmal each has 25 per cent. and Periwal and Co. P. Ltd. has the remaining 50 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reconstituted. The business at Purnea was carried on by a new reconstituted partnership firm which itself claimed to be a separate identity under the Income-tax Act and claimed separate registration and was separately assessed to income-tax. An assessee who installed the new plant or machinery must carry on the business with them in order to get development rebate and he must not transfer them before the expiry of eight years. If the identity of the two firms was different, as assessable identity was clearly so ; then it was plain that, in respect of the plant or machinery installed by the old partnership firm at Calcutta, the new firm at Purnea, a distinct and different assessable identity, could not claim development rebate either under the repealed Act or the Act. The appellant which had not installed the new machinery and plant was not entitled to any development rebate in respect of machinery and plant worth Rs. 5 lakhs odd installed in the previous year relating to the assessment year 1959-60 by Messrs. Prayagchand Hanumanmal. Shri B. Sen, learned senior counsel for the appellant, raised a two-fold contention. According to learned counsel, Messrs. Prayagchand Hanumanmal, con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to, Section 33(1) of the new Act reads : "33.(1) In respect of a new ship acquired or new machinery or plant (other than office appliances or road transport vehicles) installed after the 31st day of March, 1954, which is owned by the assessee and is wholly used for the purposes of the business carried on by him, a sum by way of development rebate, equivalent to". The other sub-sections are not relevant. Hence, omitted. Under both the repealed Act as well as the Act, two conditions precedent are required to be fulfilled for entitlement to development rebate, namely, a new ship acquired or new machinery or plant installed must be (1) owned by the assessee, and (2) wholly used for the purpose of the business carried on by him. It is an admitted case that the plant and machinery was wholly used for the purposes of the cold storage business carried on by the original firm, Messrs. Prayagchand Hanumanmal, and also by the appellant. The only dispute is whether the appellant owned the plant and machinery purchased and erecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and machinery is not for the business of the assessee for which the development allowances were accorded under section 33(1) since the machinery was not Wholly used by the assessee for his/its business during the previous accounting year. Suppose the plant or machinery was used for a purpose other than the business of the assessee, then also the assessee is not eligible for development rebate, obviously for the reason that the plant or machinery Was not used for the purpose of the business of the assessee in the previous, accounting year or a portion thereof. The crucial question, therefore, is whether the appellant is the owner of the machinery and plant in the relevant assessment year 1962-63. Acquisition of ownership is a condition precedent for availing of the development rebate under section 33(1) of the Act. It is now fairly clear from the statement of facts that the old and the new partnership firms are separately registered: under the Act and the old one was doing its business at Calcutta and the new one at Purnea. They have been separately assessed as independent assessable entities. Only the new firm was reconstituted consisting of the two partners of the old firm, Mess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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