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Issues:
1. Entitlement to a higher rate of development rebate for a priority industry. 2. Interpretation of whether conduit pipes can be considered equipment for the transmission of electricity. Analysis: 1. The judgment concerns the entitlement of a private limited company, engaged in manufacturing conduit pipes and tubes, to a higher rate of development rebate. The Income-tax Appellate Tribunal initially allowed a 15% rebate, but the company contended it was eligible for a 25% rebate as a priority industry under Schedule V of the Income Tax Act. The AAC supported the company's claim based on past history and the nature of its manufactured products. However, the Tribunal overturned this decision, leading to the matter being brought before the High Court for consideration. 2. The crux of the issue before the High Court was whether conduit pipes, used for housing electricity cables, could be classified as equipment for the transmission of electricity. The Tribunal had ruled that the conduit pipes did not qualify as such equipment, as they were used for holding cables rather than directly transmitting electricity. In contrast, the company argued that conduit pipes played a crucial role in facilitating the transmission of electricity through cables. The High Court analyzed the common parlance understanding of "equipment for the transmission of electricity" and determined that conduit pipes, by enabling the proper transmission of electricity through cables, indeed fell within this category. 3. The High Court emphasized that the primary function and common use of the conduit pipes were crucial in determining their classification as equipment for the transmission of electricity. Despite potential alternative uses for conduit pipes, such as argued by the department, the court highlighted that the dominant purpose and common usage of the articles must be considered. The court also referenced a certificate issued by the Government of India under the Industries Development and Regulation Act, which supported the view that the conduit pipes manufactured by the company were typically used in connection with the transmission of electric energy. 4. Ultimately, the High Court concluded that the conduit pipes manufactured by the company qualified as equipment for the transmission of electricity, making the company eligible for the higher rate of development rebate at 25%. The court answered the referred question in favor of the company, emphasizing the importance of conduit pipes in facilitating the transmission of electricity through cables. The company was granted costs assessed at Rs. 250 as a result of the judgment.
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