Development rebate on processing plant upheld where machinery let on hire did not alter business asset character.

Plant and machinery used for processing frozen fish and fish products, an item covered by the Fifth Schedule, retained its character as a business asset even when let out on hire and the hire receipts were assessed as business income. The mode of exploitation, whether by the assessee's own use or by leasing to another company, did not affect eligibility for the higher development rebate where the statutory conditions were otherwise met. The assessee was therefore entitled to development rebate at the higher rate of 35% on the freezing and cold storage plant and machinery.

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Issues: Whether the assessee was entitled to development rebate at 35% on freezing and cold storage plant and machinery used in the processing of frozen fish and fish products, notwithstanding that the machinery was let out on hire to another company.

Analysis: The plant and machinery were treated as business assets, and the hire receipts were assessed as business income. The only business use of the plant was in processing frozen fish and fish products, an item covered by the Fifth Schedule. The mode in which the business asset was exploited, whether by the assessee's own use or by letting it on hire, did not alter its character or the availability of the higher rebate where the statutory condition was otherwise satisfied.

Conclusion: The assessee was entitled to development rebate at the higher rate of 35%.

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