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TMI Blog1962 (2) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... Income- tax Act for the year of assessment 1955-56, the firm claimed development rebate under section 10(2)(vib) of the Act and extra depreciation on these engines newly fitted to the vehicles. The Income-tax Officer rejected the claim. On appeal by the assessee to the Appellate Assistant Commissioner the decision of the Income-tax Officer was affirmed. The Appellate authority held that development rebate was permissible only in respect of plant or machinery which was installed and that fitting of new diesel engines to old lorries did not amount to any installation of plant or machinery. The assessee preferred a further appeal before the Income-tax Appellate Tribunal, Madras. The assessee again failed and the Tribunal dismissed the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery and plant. He is further entitled to extra depreciation allowance for not more than the first five years even in respect of machinery and plant entitled to development rebate under clause (vib) deductible in determining the written down value. These benefits by way of depreciation allowance follow from the language of section 10(2)(vi) and section 10(2)(via). Section 10(2)(via) reads as follows: In respect of depreciation of buildings newly erected, or of machinery or plant being new which has been installed, after the 31st day of March, 1948, a further sum (which shall be deductible in determining the written down value) equal to the amount admissible under clause (vi) (exclusive of the extra allowance for double or multiple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31st day of March, 1954, and which is used wholly for the purpose of his business. Development rebate is a concession or privilege which the assessee obtains quite apart from the benefit derived by him by way of depreciation allowance under section 10(2)(vi) and section 10(2)(via). The real question for consideration in the present case is whether the fitting of the diesel engines into the motor vehicles constitute installation of machinery or plant. Construing the words of section 10(2)(via), which also require the installation of machinery or plant before the depreciation allowance can be claimed, this court held in Mir Mohd. Ali v. Commissioner of Income-tax [1960] 38 I.T.R. 413, that a diesel engine was machinery within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to justify or warrant the view that installation of machinery contemplated and provided for under section 10(2)(vib) of the Act is something different from such installation within the meaning of that expression in section 10(2)(via). Learned counsel for the department strenuously contended that the conception of depreciation allowance which by a gradual and slow process erodes into the original cost of the plant or machinery of the assessee is quite different from the concept of development rebate which is granted only in the first year of the acquisition, and which is not of a recurring nature. We are not able to appreciate this contention. The subject has a right to claim the development rebate so long as his claim is within the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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