9911796707
TMI Blog1978 (8) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment was finalised in this case on 30th Oct., 1971 on loss of Rs. 8,59,338. It appears that there was an appeal against the order made by the ITO and that appeal was decided by the AAC on 25th Oct., 1972. The ITO in pursuance of the AAC calculated development rebate at Rs. 25,544 taking the value of the machinery at Rs. 1,27,722. He, however, amended this order subsequently on 11th Feb., 1975 on the ground that development rebate to be allowed was on the machinery which was worth only Rs. 98,165 and not Rs.1,27,722. He also held that development rebate was admissible at 20per cent and accordingly he determined the quantum of the admissible development rebate at Rs. 19,633. The assessee made an application dated 2nd June, 1975 and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll these orders and disposed of the appeal against the order dated 11th Feb, 1975 with the observation that the claim of development rebate by the assessee was well founded as the ITO has not appreciated the facts of the case properly and disallowed the claim of the development rebate on the queer reasoning that depreciation had not been allowed on that depreciation had not been allowed on that value of the machinery. He also found that the view of the ITO was erroneous as the machinery had been actually installed and used in the business of the assessee during the previous year relevant to the assessment year under appeal. He, however, observed that the ITO had rectified his order relating to the allowance of development rebate by his orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Tribunal in I.T.A. No. 703 of 1976-77 and by the order of the Chandigarh Bench dated 15th July, 1978, the appeal of the Revenue against the order of the AAC issuing directing regarding the allowance of extra shift to the assessee was dismissed. The appeal of the assessee now relates to the observations of the AAC with regard to the development rebate. 7. At the time of hearing before us, the revenue raised a preliminary objection that the assessee was not in a position to challenge the Appellate Assistant Commissioner amended the assessment under s. 154 on 11th Feb. 1975 and therefrom the question of development rebate on plant and machinery of the value of Rs. 8,46,891 could not flow. However, the learned Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disputed this contention. We find that this matter had been left open by the AAC because in the order made by him though he has recorded the grounds taken up by the assessee that the machinery on which development rebate was admissible was Rs. 8,46,891 and not Rs. 98,165, the AAC while issuing directions did not specifically mention the amount of Rs. 8,46,892. Having heard the parties we consider it reasonable and fair to both the sides to modify the order of the AAC to the extent that the ITO shall examine the claim of the assessee for admissible development rebate in view of the finding of the AAC that machinery had in fact been installed and brought into use and development rebate was admissible. Now the question is what should be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re". He also referred to the Cost Accounting Records (Cotton Textiles) Rs. 1977 issued by the Ministry of Law, Justice and Company Affairs) by Notification dated 28th June, 1977 and pointed out that in s. 3, clause (c), the definition of cotton textiles means yarn or cloth or processed yarn or processed cloth made either wholly or partially o cotton. In view of these authorities giving the definition of textiles, he submitted that there could not be any doubt or room for doubt that the assessee was covered by the definition of textiles used in item 32 of the V Schedule as the assessee was manufacturing cotton yarn. The Revenue, however, submitted that the case of the assessee does not fall squarely within the ambit of item 32 of V Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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