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Section 33 of the Income-tax Act, 1961 [Corresponding to section 10(2)(vib) of Indian Income-tax Act, 1922] - Development rebate - Assessment year 1961-62 - Whether light fittings, ceiling and pedestal fans and waterpipe fittings in a hotel could be regarded as 'plant' and, were, therefore, entitled to development rebate - Held, yes FACTS For the assessment year 1961-62, the development rebate claimed by the assessee-firm running a hotel, was disallowed by the ITO, on the ground that the light fittings and water pipe fittings formed part of the building. In regard to fans he thought that development rebate for them was expressly disallowed in the Act itself. The AAC substantially accepted that view. The Tribunal, however, held that these items could be classified as plant. In its view the mere fact that these items were fitted to a building would not alter their character. On reference : HELD There is no specific provision in the 1922 Act which excludes ceiling fans and pedestal fans from the purview of section 10(2)(vib) of 1922 Act. Merely because the items in respect of which rebate was claimed had been fixed to the building, they would not cease to be plant. These items could in no sense be classified as Office appliances to attract the second proviso to section 10(2)(vib) of 1922 Act and, hence, these items were entitled to development rebate. Note: Decision was in favour of assessee. CASES REFERRED TO Jarrold v. John Good & Sons Ltd. [1963] 40 TC 681 (C.A.), Sundaram Motors (P.) Ltd. v. CIT [1969] 71 ITR 587 (Mad.) andYarmouth v. France [1887] 19 QBD 647. JUDGMENT Veeraswami, J.- Whether the assessee is entitled to development rebate in respect of light fittings and water pipe fittings is the question in this reference. It relates to the assessment year 1961-62. The assessee is a registered firm during that year and has been running a hotel called Ashok Hotel in the City of Madras. The rebate claimed was disallowed by the Income-tax Officer on the ground that the light fittings and water pipe fittings formed part of the building. In regard to fans he thought that development rebate for them was expressly disallowed in the Act itself. The Appellate…

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