TMI Blog1977 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... essment proceedings in respect of the assessment year 1962-63, sum of Rs. 3,56,154 was determined as development rebate under s. 33(1) of the I.T. Act, 1961, on DP Machines (EAM), card plant machinery and workshop machinery, and the ITO allowed that amount as a deduction. The Commissioner having taken the view that the amount could not be allowed as a deduction issued a notice under s. 263 of the I.T. Act, 1961, and after hearing the assessee took the view that EA Machines were part of the office appliances. He, therefore, held that development rebate to the extent of Rs. 3,50,870 was wrongly allowed as a deduction, and made an order withdrawing the grant of development rebate. He directed the ITO to revise the assessment of the assessee. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stomer data processing requirements. It is also important to bear in mind that certain machine types are designed specifically for scientific use and have no commercial applications. In contradistinction to the normal concept of office appliances the training period required for an operator of the simplest input unit manufactured by IBM is approximately 3 months. For highly sophisticated computing systems, the training period for programming staff, etc., assuming a high level of mathematical ability, is between six to nine months." In respect of the assessment year 1961-62 also, though development rebate was earlier allowed by the ITO, proceedings under s. 154 of the Act for rectification of the original assessment were taken and the dev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hematical equations, providing mathematical answers to complex business, industrial and scientific problems. " The Tribunal thus took the view that having regard to the highly technical nature of the machines and the varied purposes to which they could be put to use, they could not be regarded as office appliances in the offices of the various customers to whom the machines were let on hire. The Tribunal found that as far as the assessee was concerned, it was the business of the assessee to let these machines on hire to customers and they were wholly used for the purposes of its business of letting out the machines on hire to customers. Accordingly, the Tribunal held that the assessee was eligible for allowance of development rebate unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext of appliances which are generally used in an office as an aid or a facility for the proper functioning of the office. The facts found by the Tribunal and the statement made before the Commissioner, which does not seem to have been disputed before him, show the complicated nature of the machinery in respect of which the assessee was claiming the development rebate. The machinery was such that it could not be easily operated by laymen and special training for a period which may cover three months in some cases and a much longer period in others was necessary in order to equip a person with the knowledge and art of operating these machines. The installation and operation was obviously on a scientific basis and even for the purposes of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and information, as coded, into instructions and computations. In view of the functions which the " system " is capable of performing, it is difficult to classify these machines as office appliances. The meaning of the word " appliance ", though in a different context, fell for consideration before a learned single judge of this court in Miscellaneous Petition No. 330 of 1968, decided on 10th August, 1972, in a dispute between the present assessee and the Municipal Corporation of Greater Bombay in respect of liability to octroi and the question was whether the machines like the one with which we are dealing were machines under item 50 of the Schedule to the Bombay Municipal Corporation Act, or were kinds of apparatus and appliances and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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