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Issues: Whether development rebate was admissible under section 10(2)(vib) of the Indian Income-tax Act, 1922 on new kolhus let out on hire by the assessee, and whether such kolhus could be regarded as installed and wholly used for the purposes of the assessee's business.
Analysis: The expression "plant" in section 10 and the word "installed" were held to bear a wide meaning, depending on the nature of the business and the article concerned. In a business whose very activity is hiring out kolhus, installation is complete when the kolhus are placed in position for service or use, and the fact that the hirer uses them in its own operations does not prevent them from being wholly used for the assessee's hiring business. The Court also held that no additional words could be read into the taxing provision to confine the rebate only to plant personally used by the assessee in processing operations, and the provisions relating to income from let-out machinery did not exclude such income from assessment under the head of business.
Conclusion: Development rebate was admissible on the new kolhus, and the question was answered in the affirmative in favour of the assessee.
Final Conclusion: The assessee was entitled to development rebate on the kolhus let out on hire, because the statutory requirements of installation and use for business were satisfied on the facts of a hiring business.
Ratio Decidendi: For development rebate under section 10(2)(vib), plant or machinery used in a hiring business is installed when placed in position for service or use, and it is wholly used for the assessee's business if it is let out in the ordinary course of that business; no restrictive words may be read into a taxing provision beyond its clear language.
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