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Claim for higher development rebate on generators, trolley, and diesel tanks for assessment years 1974-75 and 1975-76. Analysis: The judgment concerns the entitlement of a public limited company to claim a higher development rebate for generators, trolley, and diesel tanks used in its business during the assessment years 1974-75 and 1975-76. The Income-tax Officer initially granted a 25% development rebate for all three items. However, upon reassessment, the Officer disallowed the rebate for trolley and diesel tanks and reduced the rate for generators to 15%. The Commissioner of Income-tax (Appeals) reversed this decision, allowing a 25% rebate on the actual cost of all items. The Appellate Tribunal upheld this decision, emphasizing the use of the items in the manufacture of specified articles. The main issue raised was whether the Tribunal was justified in directing the higher development rebate based on the items being part of 'textile machinery.' The court analyzed the provisions of section 33 of the Income-tax Act, aimed at promoting industrial development by granting development rebates. Referring to precedents, the court emphasized interpreting the law broadly to cover all legitimate manufacturing activities related to specified industries. The court considered the purpose behind installing generators, highlighting their essential role in ensuring uninterrupted power supply for manufacturing processes, especially for yarn production. It concluded that generators qualify for higher development rebate as they are crucial for the manufacturing process and not limited to textile machinery alone. Regarding trolleys, the court rejected the Officer's view that they are transport vehicles, asserting that trolleys within factory premises are essential for material transport and production. Drawing on a precedent, the court held trolleys as plants used for internal material transport, not falling under the exclusionary clause for road transport vehicles. Similarly, the court affirmed the Tribunal's decision on diesel tanks, considering them as essential plants for business operations, eligible for development rebate under section 33. In conclusion, the court affirmed the Tribunal's decision, granting the company a higher development rebate for generators, trolley, and diesel tanks. The court interpreted the law purposively to support industrial growth and manufacturing activities, emphasizing the importance of essential machinery and plants in the production process. The judgment favored the company's claim for development rebates on all three items, rejecting the Revenue's arguments.
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