TMI Blog1994 (12) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 1974, relevant to the assessment year 1975-76 ? " The material facts are as under: The assessee is a limited company. It was incorporated on June 21, 1973. It became a partner in a firm styled Lokmat on July 1, 1973. The firm used to close its accounts every year on June 30. On December 31, 1973, the firm was dissolved and the assessee-company took over all its assets and liabilities as on December 31, 1973. The assessee-company closed its accounts on June 30, 1974. In the course of proceedings for assessment of its income for the assessment year 1975-76 relevant to the accounting year ended on June 30, 1974, the assessee-company claimed development rebate of Rs. 1,40,028 on the cost of machinery worth Rs. 9,33,528. The order f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n terms of the above contract, the machinery was purchased by it and installed in its business. According to the assessee, the expression " assessee" appearing in section 16(c) of the Finance Act, 1974, includes the predecessor-in-business of the assessee. On the other hand, the contention of the Revenue before the Tribunal was that the assesseecompany itself having not entered into any contract for the purchase of the machinery in question on or before the stipulated date, it was not eligible for the benefit of development rebate on the strength of section 16(c) of the Finance Act, 1974. This contention of the Revenue did not find favour with the Tribunal. The Tribunal accepted the contention of the assessee and observed that the requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inuing the grant of development rebate in respect of machinery or plant installed after May 31, 1974. This notification reads : " In exercise of the powers conferred by sub-section (5) of section 33 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that the deduction in respect of development rebate under section 33 of the said Act shall not be allowed in respect of a ship acquired or machinery or plant installed after the 31st day of May, 1974. The benefit of development rebate was, however, continued by section 16 of the Finance Act, 1974, for further periods specified therein, despite withdrawal of the same by the Central Government by the above notification under section 33(5) of the Act. Section 16 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in such machinery or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant." (emphasis supplied). Thus, section 33 of the Act which provides for the allowance of development rebate, the notification of the Central Government which withdraws the same in respect of machinery installed after May 31, 1974, and section 16(c) of the Finance Act, 1974, which provides for the continuance of the same despite the above notification in cases which fulfil the requirements specified therein should all be read together to ascertain whether the assessee is eligible for development rebate in respect of a particular machinery. The position t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of the machinery in question had been entered into by the assessee-company. It is also not possible in this case to treat the contract entered into by the partnership firm on June 10, 1973, to be a contract entered into by the assessee-company, as the assessee-company had not even come into existence on that date. In view of the above discussion and the clear language of section 16(c) of the Finance Act, 1974, we find it difficult to agree with the Tribunal that to avail of the benefit of section 16(c) of the Finance Act, 1974, it is sufficient that the order for purchase of the machinery is placed before the specified date and that it is immaterial as to who placed the orderthe assessee or its predecessor-in-interest. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial or liberal interpretation cannot be applied to stretch or pervert the clear language of an enactment. Principles or rules of interpretation are not rules of law. They serve as guides in the interpretation of provisions of law which are vague or ambiguous. They are merely aids to construction or interpretation of statutes and should not be treated as masters. They can be discarded or ignored, if the facts and circumstances so require, and new rules of interpretation may be evolved as and when necessary to meet new or unique situations. Having regard to the above discussion and the reasons set out above, we are of the clear opinion that the assessee-company is not entitled to development rebate on the basis of the special provision cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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