Law:

Section:

Section 33 of the Income-tax Act, 1961 - Development rebate - Assessment year 1971-72 - Assessee-firm which was running hotel was disallowed development rebate in respect of lift, air-conditioning plant and sanitary fittings on ground that it was not an Indian company and not approved by Central Government in terms of proviso to section 33(6) - Whether since it was not case of revenue that assessee had been running its office in premises - Where machinery and plant were installed or any partners or servants of assessee were using any part of premises in which machinery and plant were installed as residential accommodation and nor was it case of revenue that assessee had been using place for purpose of receiving and entertaining its guests gratuitously, section 33(6) was not attracted - Held, yes - Whether therefore, assessee's claim for development rebate was to be allowed - Held, yes FACTS The assessee-firm was running a hotel. During the assessment year 1971-72, the assessee claimed certain sum by way of development rebate under section 33 in respect of a lift, air-conditioning plant and sanitary fittings installed in the hotel during the relevant period. The ITO held that the assessee was not an Indian company and was not approved by the Central Government as stated in the proviso to sub-section (6) of section 33, and therefore, it was not entitled to the rebate under section 33(1)(a) and (b) (B) (iv )(b). On revision, the Commissioner confirmed the order of the ITO. On writ: HELD A close study of section 33 makes the point clear. The extent of rebate claimable in respect of machinery and plant by an assessee running a hotel which is approved by the Central Government is set out in section 33(1)(b)(B)(ii ). The case of the assessee running a hotel not falling under the above clause falls under the residuary clause, namely, section 33(1)(b)(B)(iv ). Sub-section (6) of section 33 which was enacted by the Finance Act, 1965, provided that notwithstanding anything contained in the earlier part of section 33, no deduction by way of development rebate would be admissible in respect of any machinery or plant installed after 31-3-1965, in any office premises or any…

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