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TMI Blog1975 (12) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific provision under section 155(5) for the withdrawal of the development rebate ?" For the assessment year 1964-65 the assessee, who was an individual carrying on business under the name and style of "Cochin Company", was assessed to tax by an order passed by the Income-tax Officer, Company Circle, Ernakulam, dated July 27, 1967. In making that assessment the Income-tax Officer had allowed to the assessee a deduction of Rs. 2,619 by way of development rebate in respect of certain machinery which the assessee had installed in his business premises on June 30, 1962. The business of the assessee, which, as already noted, was proprietary in character was converted into a partnership with effect from August 24, 1962. It was long after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the only provision under which the Income-tax Officer could validly withdraw the development rebate that had been already allowed was section 155(5) of the Act and that inasmuch as the time limit prescribed by the said section had elapsed long prior to the date on which the order withdrawing the development rebate was passed by the Income-tax Officer in purported exercise of his power under section 143(b) the reassessment proceedings were illegal. In the view of the Appellate Assistant Commissioner, section 155(5) being a special provision specifically dealing with the withdrawal of the development rebate, the applicability of section 147 which is a general provision is excluded in respect of cases covered by section 155(5). On thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the 31st day of December, 1957, in any assessment year under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (11 of 1922), and subsequently-- (i) at any time before the expiry of eight years from the end of the previous year in which the ship was acquired or the machinery or plant was installed, the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government, a local authority, a corporation established by a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or in connection with any amalgamation or succession referred to in sub-section (3) or sub-section (4) of section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed to an assessee in respect of the plant or machinery and subsequently, that is, after the development rebate had been already allowed, such ship, machinery or plant should have been transferred by the assessee to any person other than the Government or a local authority, etc., before the expiry of eight years from the end of the previous year in which the plant or machinery was installed. In the present case the development rebate in respect of the machinery was allowed to the assessee only on July 27, 1967, when the assessment of the assessee for the year 1964-65 was completed by the Income-tax Officer. The transfer of the machinery resulting from the conversion of the proprietary business of the assessee into partnership had taken pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusive and whether in a case where action could have been taken by the Income-tax Officer under section 155(5) it would be open to him to resort to the general provision contained in section 147(b) does not really arise before us for determination. But since arguments on this point have been addressed before us by both sides we may observe that had it been necessary for us to decide this question we would have had no hesitation in adopting with respect the view expressed by the Andhra Pradesh High Court in G. Sreerama Murthy v. Income-tax Officer and by the Gujarat High Court in Commissioner of Income-tax v. Himatlal Bhagubhai that the two sections aforementioned are not mutually exclusive and that it is open to the Income-tax Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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