Law:

Section:

Section 33 of the Income-tax Act, 1961, read with Entry 16 of Fifth and Sixth Schedule of the Income-tax Act, 1961 - Development rebate - Assessee was engaged in business of manufacturing waterproof paper and entire process of manufacture from pulp to paper was done by itself - Assessee claimed that since it was engaged in manufacture of paper within meaning of Entry 16 of Fifth Schedule, he was entitled to a higher development rebate under section 33(1)(B) - ITO holding that manufacturing waterproof paper would fall outside scope of Entry 16 of Fifth Schedule as well as Entry 16 of Sixth Schedule, rejected claim of higher development rebate - Tribunal, however, allowed assessee's claim - Whether since waterproof paper went through all manufacturing processes in assessee's plant right from basic raw material used for purpose of manufacture of paper, such a manufacturing activity was to be regarded as coming within relevant entries in Fifth and Sixth Schedules - Held, yes - Whether, therefore, Tribunal was justified in allowing higher rate of development rebate to assessee - Held, yes - Whether, however, in view of fact that Tribunal had rendered its decision without any reference to size of development rebate reserve created by assessee, matter was to be remanded to Tribunal to consider amount of minimum relief afresh - Held, yes FACTS The assessee was engaged in the business of manufacturing waterproof paper. The entire process of manufacture from pulp to paper was done by the assessee. The claim of assessee was that since it was engaged in the manufacture of paper within the meaning of Entry 16 of the Fifth Schedule, he was entitled to a higher development rebate. The assessee had also created a development rebate reserve, which was a condition precedent to the grant of the allowance. The ITO taking the view that manufacturing waterproof paper would fall outside the scope of Entry 16 of the Fifth Schedule as well as Entry 16 of the Sixth Schedule, rejected the assessee's claim of the development rebate, at higher rate. On appeal, the Tribunal allowed the assessee's claim holding that the waterproof paper manufactured by the assessee in its factory must be…

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