TMI Blog1984 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the assessee is entitled to the higher development rebate under section 33(1)(b)(B)(i) in respect of manufacture of aluminium caps? " The assessee is a private limited company incorporated on July 15, 1971. However, it appears that the production in the company commenced on November 21, 1973. For the assessment year 1975-76 relating to the accounting year ending June 30, 1974, the assessee claimed relief under section 80J of the Act and also development rebate at the higher rate of 25%. It is not in dispute that the assessee is entitled to relief under section 80J of the Act. The Income-tax Officer held that the assessee is entitled to relief, but restricted the same to the period of production which co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the claim has to be considered under Item (2) of Schedule V of the Act, and following the decision in CIT v. West India Steel Co. Ltd. [1977] 108 ITR 601 (Ker) [FB], it held that the items manufactured by the assessee, viz., aluminium caps, would come within the purview of item (2) in the Fifth Schedule to the Act. Accordingly, the Tribunal held that the assessee is entitled to higher development rebate as claimed by it. The Tribunal has, however, referred both the questions for the opinion of this court. The answer to the first question does not present any difficulty in view of the decision of this court in CIT v. Mysore Petro-Chemical Ltd. [1984] 145 ITR 416, wherein this court has held that the relief provided under section 80J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri K. Srinivasan, learned counsel for the Revenue, contended that aluminium caps are different from aluminium metal contemplated under the above item qualifying for a higher rebate under section 33 of the Act and that the said caps come within the purview of " things " and commercially a commodity different from aluminium metal. On the other hand, Sri G. Sarangan, learned counsel for the assessee, contended that " aluminium metal " necessarily includes aluminium caps manufactured by the assessee. The word " metal " used in item (2) in the Fifth Schedule is only to distinguish the same from a compound or alloy and as such any article made out of aluminium metal will fall within the purview of item (2) in the Fifth Schedule to the Act q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the customer purchased 'iron and steel' in that shape. We, therefore, hold that the bars, flats and plates sold by the assessee are iron and steel exempted under the notification. " Sri Sarangan placed reliance upon the two decisions of the Kerala High Court in CIT v. Mittal Steel Re-Rolling Allied Industries (P.) Ltd. [1977] 108 ITR 207 and CIT v. West India Steel Co. Ltd. [1977] 108 ITR 601 [FB]. In the latter decision, following the earlier one, it was held by the Kerala High Court that M. S. rods and steel sections are basically " iron and steel (metal)" within the meaning of item (1) in the Fifth Schedule to the Act, entitling them to higher rate of development rebate under section 33 of the Act. It is observed at page 605, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n common or commercial parlance as a specific article, then that article can no more be understood basically as a metal. In the instant case, from aluminium metal, which is a raw material in the form of sheets, the assessee manufactures aluminium caps. The said finished product can hardly be said to be aluminium metal. To call it the aluminium metal, would perhaps be an abuse of the word " metal " used in item (2) in the Fifth Schedule. If that is the interpretation given, then no article made of aluminium could escape item (2) in the Fifth Schedule. That could never have been the intention of Parliament. In our opinion, therefore, the Tribunal is not right in holding that the items manufactured by the assessee will come within the mean ..... X X X X Extracts X X X X X X X X Extracts X X X X
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