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TMI Blog1976 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... i-storied building with lifts and central air-conditioning system. The assessee occupied certain portion of this building and let out its remaining portions to several tenants, who paid monthly rents and also separate sums for using the lifts and for enjoying the benefits of the air-conditioning system. The rental income was assessed in the hands of the assessee under section 22 of the Act which was confirmed by the appellate authorities. The assessee claimed deductions for development rebate under section 33(1) of the Act in respect of the airconditioning, plant and the lifts. The Income-tax Officer disallowed the said claim but it was ultimately allowed by the Tribunal by following the judgment of the Kerala High Court in the case of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the Act and contended that the meaning of these two words are different. It is his submission that this section contemplates the user of the machinery or the plant in its entirety and in view of the rules of grammar it should be held that the word "wholly" used in this section refers to the word "plant" and not to the words "for the purpose of business carried on" by the assessee and, therefore, it should also be held that since the assessee had used the plant or machinery in its entirety the development rebate should be allowed under this section as opined by the Tribunal. Mr. Ginwalla also cited the case of Bentleys, Stokes and Lowless v. Beeson (H.M. Inspector of Taxes) [1952] 33 TC 491 (CA) but it was not a case of development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lley Estates (1938) Ltd. [1965] 58 ITR 618 (Ker) was not drawn to the above decisions of the Patna High Court. In the Kerala case the assessee used some assets in the cultivation of both tea and coffee. Income arising out of plantation of coffee was not taxable. The assessee claimed proportionate development rebate in respect of these assets under section 10(2)(vib) of Indian Income-tax Act, 1922. The High Court opined that the expression "wholly used for the purpose of the business carried on" by the assessee in section 10(2)(vib) of the Act does not mean "exclusively used for the purpose of the business carried on by the assessee" but means "exclusively used in their entirety" and accordingly allowed the assessee's claim for proportionate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g on ...... Assets 'wholly used' do not mean 'exclusively used'. The meaning that can be attributed to the expression 'wholly used' is 'used in their entirety" ........ we are of opinion that the words 'wholly used' must be given their full scope as a condition to an allowance of development rebate. The words do not appear to mean that, when not required for particular business purposes, they can or have to be used for other purposes having regard to continuance or nature of their structural built-in set up, and still development rebate can be claimed. If that were the position, we fail to understand the significance of the word 'wholly'. It does not mean wholly but qualified by circumstances. Obviously, when the machinery or plant is use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is much force in the contentions of Mr. Sengupta. It shall be presumed that Parliament knew the judgment of the learned Chief Justice in Dalmia Cement Ltd.'s case [1945] 13 ITR 415 (Pat) at the time of enacting the Income-tax Act, 1961. Therefore, it must be held that Parliament has accepted the meaning of the word "wholly" which means "exclusively" as stated by the learned Chief Justice and, therefore, the rules of grammar must give way to this real intention of the legislature as stated in Maxwell on the Interpretation of Statutes, 11th edition, at page 78. The Madras High Court has also distinguished the Kerala case, reported in [1965] 58 ITR 618 (Ker), in which the Patna cases reported in [1945] 13 ITR 415 and [1946] 14 ITR 106 wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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