Law:

Section:

Section 33(1)(b)(B)(i)(b) of the Income-tax Act, 1961 - Development rebate - Rate of - Assessment year 1974-75 - Whether woollen hosiery for manufacture of which assessee installed new machinery did not fall under entry 32 of Fifth Schedule, and, consequently, assessee was entitled to development rebate at 15 per cent only and not 25 per cent as claimed - Held, yes Facts The assessee had installed new machinery for manufacture of woollen hosiery for export. For the assessment year 1974-75, the assessee-company claimed development rebate at a higher rate under section 33(1)(b)(B)( i)(b), read with item 32 of the Fifth Schedule, The Tribunal allowed the assessee's claim. On reference : Held As is well known, hosiery is a word which in its compass covers both cotton and woollen garments. This being so, when the entry 32 specifically mentions 'made wholly or mainly of cotton' it must clearly be construed to exclude woollen hosiery. Woollen hosiery would, thus, not fall under this entry. Hence, 15 per cent development rebate was all that the assessee could be entitled to in respect of the machine in question under section 33(1)(b)(B)( iv)(b). Ashok Bhan and Ajay Mittal for the Applicant. D.K. Gupta for the Respondent. JUDGMENT Sodhi, J. - The matter here pertains to development rebate. The controversy being whether the entitlement of the assessee was to 15 per cent or 25 per cent of such rebate. 2. The assessee had installed new machinery worth Rs. 7,80,645 during the assessment year 1974-75 and thereafter claimed development rebate in respect of it. The Tribunal allowed it 25 per cent development rebate and this is what led the following question to be referred to this Court for its opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that taking into consideration the provisions of section 33(1)(b)(B)(i )(b), read with item 32 of the Fifth Schedule to the Income-tax Act, 1961, the assessee was entitled to development rebate at the rate of 25 per cent for the year under appeal?" 3. Admittedly, the machinery in question has been used by the assessee for manufacture of…

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