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Issues: Whether development rebate at the enhanced rate under section 33 was admissible where the machinery, though installed for manufacture of automobile ancillaries specified in the Fifth Schedule, was also used for manufacture of similar articles for other machinery.
Analysis: The machinery had been acquired for the assessee's business and was wholly used for the purpose of that business. The statutory requirement under section 33(1)(a) and (b) is that the machinery be acquired and wholly used for the business, while the enhanced rebate under section 33(1)(B)(i)(a) depends on installation for manufacture of an article or thing included in the Fifth Schedule. The relevant entry in Item 20 of the Fifth Schedule covered automobile ancillaries. The statutory language did not require the machinery to be exclusively used only for that scheduled manufacture; it was sufficient that it was installed for that purpose and wholly used in the assessee's business.
Conclusion: Development rebate at 35% was allowable. The question was answered in the affirmative and in favour of the assessee.
Ratio Decidendi: For the enhanced development rebate under section 33, machinery need not be exclusively used only for manufacture of the scheduled article if it is installed for that purpose and wholly used in the assessee's business.
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