TMI Blog1997 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was granted development rebate at the rate of 25 per cent. in respect of generators, trolley and diesel tanks. The Income-tax Officer reopened the assessment under section 147(b) of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act"), and held that development rebate is not admissible in respect of trolley and diesel tanks, but in respect of generators, the development rebate would be admissible at the rate of 15 per cent. The Commissioner of Income-tax (Appeals), in an appeal preferred by the assessee against the orders of reassessment held that the development rebate is admissible at the rate of 25 per cent. on the actual cost of the generators, trolley and diesel tanks. The view of the Commissioner (Appeals) was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three items in dispute and the claim of the assessee is that the assessee would be entitled to claim development rebate in respect of all the three items at the rate of 25 per cent. of the actual cost of the plant under sub-clause (B)(i) of clause (b) of sub-section (1) of section 33 of the Act on the ground that all the three items were installed for the purpose of manufacture or production of the articles specified in entry 32 of the Fifth Schedule to the Act and the relevant entry reads as under : "Textiles, including those dyed, printed or otherwise processed, made wholly or mainly of cotton, including cotton yarn, hosiery and rope." Before considering the claim of the assessee for development rebate at the rate of 25 per cent. o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this court is that the articles manufactured or produced though not directly marketed, when used as components for other articles manufactured by the assessee are still be eligible for development rebate. The Supreme Court in CIT v. Krishna Copper and Steel Rolling Mills [1992] 193 ITR 281, has taken more or less the same view and held that incentive, concession or relief granted under section 33 of the Act has to be construed in a broad and comprehensive manner so as to cover all manufacturing activities legitimately pertaining to the specified core industry with no limitation save what may be called for by the wording of the particular entry. With this background, we have to examine the facts of the case. In so far as the generators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f articles or things specified in the Fifth Schedule cannot be confined to textile machinery alone, but extends to the machineries needed and employed for the manufacture or production of the things or articles. specified. The view of the officer that it should be confined to the textile machinery alone is not warranted and if such a restricted meaning is given, it will affect the very object behind the grant of development rebate under section 33 of the Act. The Kerala High Court in the case of CIT v. Heaveacrumb Rubber (P.) Ltd. [1989] 179 ITR 259, held that the depreciation and development rebate at the higher rate would be allowable in the case of an assessee running a rubber factory, where it was found that the water supply system a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s it was used only for the transport of the materials within the factory premises. The view of the Commissioner (Appeals) was confirmed by the Appellate Tribunal on the ground that the trolley was used within the factory premises and it cannot be regarded as a road transport vehicle. We are of the view that the trolley cannot be regarded as road transport vehicle within the meaning of clause (b) of sub-section (1A) of section 33 of the Act. It is a common knowledge that the trolley is meant for carriage of the goods from one place to another in the factory premises and it is used either for carriage of the raw materials or the finished products, The trolley is meant for facilitating easy and quick transport of the materials from one place t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilding. The diesel tank is used for the purpose of carrying on the business and it cannot be regarded either as stock-in-trade or an item which is not needed for the business purpose. The diesel tanks are installed and used for the business of the assessee. Both the Commissioner (Appeals) and the Appellate Tribunal were correct in holding that the diesel tank is a "plant" eligible for the development rebate under section 33 of the Act. The finding of the Commissioner (Appeals) is that the diesel tank is a metal storage tank for diesel oil from which the generators draw the fuel required to run them and the mere circumstance that they are imbedded in the earth would not permit their classification under the head "Buildings". It is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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