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Issues: Whether development rebate under section 33(6) of the Income-tax Act, 1961, was disallowable in respect of meters installed by an electricity supply undertaking in the residential or office premises of consumers.
Analysis: The disallowance in section 33(6) was construed in the context of the section as referring to office premises or residential accommodation of the assessee, whether owned or occupied by it, and not to premises belonging to third parties. The meters were plant of the assessee and their installation in consumers' premises was part of the assessee's statutory business activity of supplying electricity, not the kind of comfort-related machinery intended to be excluded by the provision.
Conclusion: Development rebate was allowable, and the disallowance made by the Revenue was not sustainable.
Final Conclusion: The reference was answered in favour of the assessee by holding that section 33(6) does not extend to plant and machinery installed in the premises of persons other than the assessee.
Ratio Decidendi: A disallowance provision targeting machinery installed in office premises or residential accommodation is confined to the assessee's own premises or premises in its occupation, and does not cover plant installed in third-party premises as part of the assessee's business operations.
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