TMI Blog1994 (11) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in the circumstances of the case, the Tribunal was right in law in holding that relief under section 80J to which the amalgamating company, Bombay Barges and Ships Pvt. Ltd., was entitled in respect of ships which became the property of the amalgamated company, Tyresoles Concessionaries (P.) Ltd., could be also claimed by the latter assessee-company for the balance of the period of five years in terms of section 80J(2) and in spite of the provisions of section 80J(5)(ii) ? " The assessee is a limited company engaged in the business of retreading tyres pursuant to a scheme of amalgamation, an associated concern of the assessee called Bombay Barges and Ships Pvt. Ltd. (hereinafter referred to as " Bombay Barges ") which was engaged in the business of carrying cargo in barges, merged with the assessee-company with effect from January 1, 1975. The assessee had been following the financial year as its previous year, whereas the amalgamating company (Bombay Barges) had been following the calendar year as the previous year. On February 1, 1975, Bombay Barges made a petition to this High Court praying for sanction of the scheme of its amalgamation with the assessee which was sanctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after April 1, 1975. It was, however, held that the development rebate allowable to Bombay Barges in the assessment year 1975-76 which remained unabsorbed could be carried forward and set off by the assessee-company only in the next assessment year, viz., 1976-77. The assessee-company appealed against the above order of the Commissioner (Appeals) to the Income-tax Appellate Tribunal ( " the Tribunal "). The controversy before the Tribunal was whether the assessee- company, who was the amalgamated company, wag entitled to set off the carried forward development rebate determined in the hands of amalgamating company for the assessment year 1975-76 in its own assessment for the very same assessment year. The Tribunal, on consideration of the provisions of section 33(3)(b) of the Act, held that the assessee-company was entitled to claim set off of the unabsorbed development rebate of the amalgamating company for the assessment year 1975-76 in its own assessment for the very same year. Aggrieved by this finding of the Tribunal, the Revenue applied under section 256(1) of the Act for reference of the question of law arising therefrom to this court for opinion. Being satisfied that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal also perused the instructions of the Central Board of Direct Taxes regarding grant of relief under section 80J and observed that the instructions contained therein should be construed broadly and the relief admissible to a new industrial undertaking should also be extended to ships. The Tribunal, therefore, held that the assessee-company was entitled to relief under section 80J in respect of ships acquired by Bombay Barges and there was no justification for denying the same. Aggrieved by this finding of the Tribunal, the Revenue applied under section 256(1) of the Act for reference of question of law arising therefrom. The Tribunal on being satisfied that a question of law did arise out of its above order, referred question No. 2 to this court for opinion. We shall first deal with question No. 1. There is no dispute about the fact that under section 33(3)(b) of the Act, an amalgamated company, is entitled to carry forward and set off the unabsorbed development rebate outstanding to the amalgamated company. Section 33(3) provides : " 33 (3) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any ship, mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out making any allowance under sub-section (1) or sub-section (1A) of this section or sub-section (1) of section 33A or any deduction under Chapter VI-A or section 280-O) is nil or is less than the full amount of the development rebate calculated at the rate applicable thereto under sub-section (1) or sub-section (1A), as the case may be, (i) the sum to be allowed by way of development rebate for that assessment year under sub-section (1) or sub-section (1A) shall be only such amount as is sufficient to reduce the said total income to nil ; and (ii) the amount of the development rebate, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development rebate to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year computed in the manner aforesaid, to nil, and the balance of the development rebate, if any, still outstanding shall be carried forward to the following assessment year and so on, so however, that no portion of the development rebate shall be carried forward for more than eight assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the very same assessment year, despite the clear provisions of section 33(2)(ii) read with section 33(3)(b) of the Act. The unabsorbed development rebate of Bombay Barges for the assessment year 1975-76 can be allowed to be carried forward by the assessee-company only in the assessment year 1976-77 and the following assessment years as provided in section 33(2)(ii) of the Act and not in the assessment year 1975-76. So far as the next question is concerned, we find that the amalgamated company claimed relief under section 80J for the period from January 1, 1975, to March 31, 1975. This relief was refused by the Income-tax Officer on the ground of non-fulfilment of the conditions of section 80J(5). So far as the fulfilment of the conditions of section 80J(5) is concerned, we find that there is a clear and categorical finding of the Tribunal that all the conditions were fulfilled. The only question to be decided is whether having regard to the provisions of section 80J of the Act, the assessee-company is entitled to claim development rebate for the balance period of five years. We have carefully perused the provisions of section 80J of the Act. Relief under that section is avail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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