Replacement of bus engines can qualify as new machinery for development rebate where statutory language matches an earlier interpreted provision.

Replacement of petrol engines with diesel engines in buses was treated as installation of new machinery or plant for development rebate purposes where the statutory condition required new machinery installed after a specified date. The Court applied the same construction previously given to the corresponding provision, and held that substantially similar language should bear the same meaning. On that basis, engine replacement satisfied the statutory requirement for allowance under section 10(2)(vib) of the Indian Income-tax Act, 1922, and the assessee was entitled to the rebate.

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Issues: Whether the replacement of petrol engines with diesel engines in buses amounted to installation of new machinery or plant after the specified date so as to qualify for development rebate under section 10(2)(vib) of the Indian Income-tax Act, 1922.

Analysis: The allowance under section 10(2)(vib) turned on whether the machinery or plant was new and installed after 31 March 1954. The Court applied the construction earlier adopted for the corresponding provision in section 10(2)(via), where a similar expression had been interpreted to cover replacement of petrol engines by diesel engines in buses. Since the condition that the machinery or plant be new was common to both provisions, the same interpretation governed the present case.

Conclusion: The replacement of engines satisfied the statutory requirement, and the assessee was entitled to the allowance. The appeal failed.

Ratio Decidendi: Where a statutory provision grants allowance for new machinery or plant installed after a specified date, replacement of existing engines by diesel engines can constitute installation of new machinery or plant if the statutory language is substantially the same as an earlier provision already construed by the Court.

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