1967 (5) TMI 4

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ler stands and fluted rollers fitted with rubber aprons to the spinning machinery, removal of ring-frames from certain existing parts, introduction, inter alia, of ball-bearing jockey-pulleys for converting the original band-drivers to tape-drivers and other additions and alterations in the drafting mechanism. The Income-tax Officer disallowed the claim of the assessee for Rs. 93,215 because it was not admissible as " development rebate " since the introduction of the Casablanca conversion system did not involve installation of " new machinery ". The Appellate Assistant Commissioner agreed with the Income-tax Officer. In appeal to the Appellate Tribunal, besides submitting the claim that expenditure was allowable as development rebate, t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... current repairs under section 10(2)(v) of the Act ?" The High Court accepted the finding recorded by the Tribunal that by the introduction of the Casablanca conversion system no new machinery or plant was installed but the introduction of the system amounted " to fitting of improved versions of certain minor parts " and expenditure in that behalf was of revenue nature. The High Court also held that the Tribunal had jurisdiction to permit the assessee to raise a new contention which was not raised before the departmental authorities. The Commissioner has appealed to this court, with special leave. The Tribunal had evidence before it from which it could be concluded that by introducing the Casablanca conversion system the assessee made....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sessee to relief is not restricted to the plea raised by him. The Tribunal in the present case was of the opinion that in order to adjust the tax liability of the assessee, it was necessary to ascertain the true nature of the Casablanca conversion system. The assessee had, it is true, contended that the introduction of the Casablanca conversion system was of the nature of machinery or plant which being new had been installed for the purpose of business within the meaning of section 10(2)(vib) of the Indian Income-tax Act. The Tribunal rejected the claim of the assessee, but on that account the Tribunal was not bound to disallow the claim of the assessee for allowance of the amount spent if it was a permissible allowance on another ground....