TMI Blog1994 (12) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1975-76 has been rightly rejected ? 2. Whether, on the facts and in the circumstances of the case, the claim of the assessee for allowance of investment allowance of Rs. 31,000 for the assessment year 1977-78 has been rightly rejected ? " The material facts giving rise to this reference are as follows : The assessee is a private limited company. This reference pertains to the assessment years 1975-76 and 1977-78. By a deed of sale dated February 28, 1977, effective from March 1, 1977, the assessee-company sold its entire business undertaking consisting of Sarabhai M. Chemical Division, Systronics Division and Telerad Division and Sarabhai Electronics Research Centre Division to Ofisade Pvt. Ltd. The assessee had been allowed devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that view of the matter, the Commissioner (Appeals) cancelled both the orders passed by the Income-tax Officer and allowed the appeals of the assessee. The Revenue appealed to the Tribunal against the order of the Commissioner (Appeals). The Tribunal considered the provisions of sections 34(3)(b) and 155(5) and also sections 32A(5) and 155(4A) of the Act and observed that these provisions provide for withdrawal of development rebate or investment allowance in a case where the machinery is sold or otherwise transferred within the stipulated period. The Tribunal held that the above provisions would come into play as soon as plant and machinery is sold or otherwise transferred. The Tribunal did not accept the contention of the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the end of the previous year in which it was acquired or installed, any allowance made under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (XI of 1922), in respect of that ship, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of subsection (5) of section 155 shall apply accordingly : Provided that this clause shall not apply-- (i) where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1958 ; or (ii) where the ship, machinery or plant is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment ; and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the sale or transfer took place or the money was so utilised. " The provisions of sections 32A(5) and 155(4A) which are applicable to the assessment year 1977-78, so far as relevant at the material time, stood as under : " 32A. (5) Any allowance made under this section in respect of any ship, aircraft, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act,-- (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto, the period of four years specified in sub-section (7) of that section being reckoned,-- (i) in a case referred to in clause (a) from the end of the previous year in which the sale or other transfer took place ;..." The language of the above provisions is clear and unambiguous. The intention of the Legislature is to withdraw the benefit of development rebate given to the assessee in respect of certain machinery if such machinery is sold or " otherwise transferred " by the assessee within the stipulated period. The expression "otherwise transferred" is a very wide expression and takes within its sweep transfer of the assets from the assessee to some other person by any means or mode whatsoever. There can be no controversy about ..... X X X X Extracts X X X X X X X X Extracts X X X X
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