Wholly used for business need not mean exclusively used; incidental use for another activity did not defeat development rebate.

Machinery or plant qualifying under the development rebate provision had to be new, installed after the relevant date, and wholly used for the business carried on by the assessee. The expression "wholly used" was treated as distinct from "exclusively used", especially where the same provision elsewhere used both words together. Assets used in their entirety in the tea business and also, when spare, in coffee cultivation were still regarded as wholly used for the assessee's business. The fact that the coffee income was agricultural income did not by itself defeat the statutory condition, because the decisive question was the nature of the asset's user in the business.

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Issues: Whether assets commonly used for the production of both tea and coffee were entitled to proportionate development rebate under section 10(2)(vi b) of the Indian Income-tax Act, 1922, on the footing that they were wholly used for the purposes of the business carried on by the assessee.

Analysis: The allowance under section 10(2)(vi b) depended on machinery or plant being new, installed after the relevant date, and wholly used for the purposes of the business carried on by the assessee. The expression "wholly used" was held to be different from "exclusively used", particularly because the same subsection elsewhere used the composite expression "wholly and exclusively". The assets in question were used in their entirety in the tea business and, when available, were also used in the coffee cultivation. The fact that coffee income was agricultural income and not treated as business income under the Act did not by itself negative the statutory condition, since the decisive question was the nature of the user of the assets in the assessee's business.

Conclusion: The assets satisfied the requirement of being wholly used for the purposes of the business carried on by the assessee, and proportionate development rebate was admissible. The answer to the referred question was in the affirmative, in favour of the assessee.

Ratio Decidendi: The words "wholly used for the purposes of the business carried on by the assessee" are not synonymous with "exclusively used", and assets used in their entirety in the assessee's business do not cease to satisfy the statutory condition merely because they are also incidentally employed for another use when spare from the main business.

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