Extra depreciation allowance remains available despite withdrawal of development rebate when approval under section 33 continues in force.

Extra depreciation allowance under item III(iii) of Appendix I was held available where the development rebate under section 33 had been withdrawn, because withdrawal of that rebate did not repeal section 33 or remove the separate allowance mechanism. The reference to section 33 in the Rules was treated as a requirement that the assessee retain the necessary Central Government approval, and that approval remained in force through the competent tourism department. As the assessee also met the other rule conditions, the allowance was upheld in favour of the assessee and against the Revenue.

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Issues: Whether the assessee was entitled to extra depreciation allowance under sub-item (iii) of item III of Part I of Appendix I to the Income-tax Rules, 1962, where the development rebate under section 33 of the Income-tax Act, 1961 had been withdrawn but approval under section 33 remained in force.

Analysis: Section 33 dealt with development rebate, but the withdrawal of that rebate did not repeal section 33 or extinguish the separate provision for extra depreciation allowance. The reference to section 33 in the Rules served only to ensure that the assessee had the requisite approval of the Central Government. The approval granted through the Department of Tourism, which was competent to grant such approval, was in force, and the assessee satisfied the other requirements of the relevant rule.

Conclusion: The claim for extra depreciation allowance was allowable and the question was answered in favour of the assessee and against the Revenue.

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