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Issues:
1. Allowance of development rebate for an offset machine installed on 30th March, 1975 but allegedly not used in the accounting period. 2. Commissioner's direction to withdraw the development rebate based on lack of evidence of actual usage of the machinery. 3. Dispute over the interpretation of "installed" machinery and its implications on the allowance of development rebate. 4. Assessment of the evidence presented by the assessee regarding the usage of the machinery on 30th and 31st March, 1975. 5. Consideration of the time lag between the installation of the machinery and the assessment of its usage. 6. Evaluation of the reasons for not claiming depreciation and its impact on the claim of actual usage of the machinery. Analysis: The appeal before the Appellate Tribunal ITAT MADRAS-B concerned the allowance of development rebate for an offset machine installed on 30th March, 1975, for the assessment year 1975-76. The Commissioner contended that the rebate should be withdrawn as there was no evidence of the machine being used in the accounting period. The assessee argued that the machine was indeed used on 30th and 31st March, 1975, despite no depreciation being claimed due to oversight based on old rules. The Commissioner emphasized the lack of evidence supporting the actual usage of the machinery, leading to the withdrawal of the rebate. The Tribunal considered the definition of "installed" machinery as placing it in a position for service or use, and referenced previous judgments to support this interpretation. Despite the time lag of 2-1/2 years, the Tribunal evaluated the plausibility of proving the machine's usage based on the evidence presented. It noted that the readiness of the machine for use and the absence of reasons for non-usage supported the assessee's claim. The Tribunal reasoned that the lack of a significant variation in energy consumption over two days made it difficult to use energy consumption as a test for usage. Additionally, the change in depreciation rules and the possibility of oversight in claiming depreciation were considered in the assessment of the machinery's actual usage. Ultimately, the Tribunal disagreed with the Commissioner's decision and directed the restoration of the development rebate, amounting to Rs. 38,339, which was initially allowed by the Income Tax Officer. The Tribunal accepted the assessee's explanation and concluded that there was insufficient evidence to disregard the claim of the machinery being used on 30th and 31st March, 1975. As a result, the appeal was allowed in favor of the assessee.
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