Law:

Section:

Section 33 of the Income-tax Act, 1961 [Corresponding to section 10(2)(vib) of the Indian Income-tax Act, 1922] - Development rebate - Assessment year 1960-61 - Assessee-firm carried on business of letting out Kolhus on hire - During relevant assessment year, assessee added some new Kolhus in stock and also let them on hire - Whether assessee was entitled to development rebate in respect of new Kolhus - Held, yes FACTS The assessee, a firm, carried on the business of letting out the Kolhus on hire. The new Kolhus and Kharad machines were added and let out. The ITO disallowed the development rebate on the newly added kolhus and the kharad machines. On appeal, the AAC allowed the assessee's claim on revenue's appeal, the Tribunal set aside the order of the AAC and restored that of the ITO. On reference: HELD The words 'plant and machinery' in section 10(2) of 1922 Act have to be given a very wide meaning. Even for the purposes of section 10(2)(vib ) of 1922 Act, as it stood at the relevant time and before the Income-tax Act of 1961, wherein by section 33, which corresponded to the old section 10(2)(vib), a specific provision was added excluding office appliance or a road transport vehicle from the definition of 'plant'. In any case, kolhus are neither office appliance nor 'vehicles' and, therefore, if not machinery would certainly be a 'plant' and as such qualify for depreciation and development rebate provided the other conditions of section 10(2)(vib ) of 1922 Act are satisfied. There cannot also be much doubt that depreciation as well as development rebate could only be claimed by the person who is the owner of the property. Sub-clause (vi) of sub-section (2) of section 10 of 1922 Act makes it clear that depreciation can only be claimed by the person whose property is attached (sic). The words used are, 'being the property of the assessee', in other words, the owner of the property. The assessee in the instant case was undoubtedly the owner of the kolhus. The conditions for qualifying for development rebate are : (1) that the asset is new, (2) installed after the 31-3-1954, (3) it should be owned by the assessee, (4) it is used wholly for the purposes of the…

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