1999 (1) TMI 2

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....rrectness of the view taken by a Division Bench of the High Court at Madras in Tax Case No. 146 of 1979 (see [1985] 155 ITR 794) and followed in Tax Case No. 140 of 1980. The questions before the High Court were : "(1) Whether, on the facts and in the circumstances of the case, it has been rightly held by the Tribunal that the assessee was entitled to the higher rate of development rebate at 35....

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....hich such embroidery work was done". Upon this basis it came to the conclusion that the assessee was entitled to the benefit of development rebate at an enhanced rate under the provisions of section 33(1)(b)(B)(i) of the Income-tax Act, 1961. It said that the mere fact that the assessee start with basic cloth would not bar the assessee from being entitled to the higher development rebate because t....

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....ter and structure and was identifiable as cloth. The operation done by the assessee on the cloth did not bring into existence a commercially different and distinct commodity from the feed-in material. Section 33(1)(b)(B)(i), in so far as it is relevant, reads thus : "where the machinery or plant is installed for the purposes of business of construction, manufacture or production of any one o....

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.... "otherwise processed". If the machinery or plant is required to be utilised in the production of such textiles, at whatever stage, the assessee is entitled to the benefit of this development rebate. It is not disputed, fairly, that if the assessee had been producing the embroidered cloth starting from scratch, that is, by starting with cotton, this machinery would have been entitled to be conside....