1977 (5) TMI 33 - AT - Income Tax

Summary

Issues: Claim of development rebate for electrical installations under specific schedule entries.

In this case, the assessee, an authorized dealer engaged in building bus bodies and chassis, claimed development rebate under a specific provision of the Income Tax Act, which was initially denied by the Income Tax Officer (ITO). Upon appeal, the Assistant Commissioner (AAC) allowed the claim by referring to the relevant item in the Fifth Schedule of the Act. The Revenue appealed, arguing that the assessee's activities did not align with the specified items in the Schedule, particularly concerning the manufacture of motor trucks and buses. The Revenue contended that the assessee was only constructing bus bodies, not manufacturing complete buses. The assessee, on the other hand, argued that it was the entity responsible for producing buses by assembling bus bodies on chassis, which were typically sold separately by chassis manufacturers. The assessee also proposed that its claim could fall under a different item in the Fifth Schedule related to automobile ancillaries. The Tribunal analyzed the submissions and the legislative intent, emphasizing that the words in fiscal acts must be interpreted in their popular and commercial sense. The Tribunal concluded that while the claim did not align with the specific item related to motor trucks and buses, it was allowable under the item concerning automobile ancillaries. The Tribunal found that the bus body manufactured by the assessee constituted an automobile ancillary essential for the completion of a bus. Therefore, the Tribunal upheld the AAC's decision to allow the development rebate claim under the alternative item in the Fifth Schedule, despite differing in reasoning. Consequently, the appeal by the Revenue was dismissed, affirming the order in favor of the assessee.