1982 (8) TMI 30

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....DDY J.-The question referred in this case is: Whether, on the facts and in the circumstances of the case, the assessee-company is entitled to claim development rebate at 25% for the assessment year 1972-73. The assessee is a limited company having a cotton spinning mill. For the year 1968-69, it claimed 25% development rebate on the newly purchased machinery amounting to Rs. 2,26,257. The asses....

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....der s. 256(1) of the I.T. Act. Section 33(1)(a) says that in respect of new machinery used for the purposes of business carried on by an assessee, there shall be allowed deduction in respect of the previous year by way of development rebate as specified in cl. (b). Clause (b) says that in the case of machinery or plant specified in the Fifth Schedule, the development rebate shall be 25% of its ....

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.... be "textiles made wholly or mainly of cotton including cotton yarn But, this interpretation would make the words " including cotton yarn superfluous because before cotton can be converted into textile it must first be converted into yarn. It is difficult to conceive of a textile made directly from cotton, i.e., without first converting the cotton into yarn. Further, if this interpretation were to....

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....out of rope. Moreover, the clause concerned is an entry in the Schedule which must be construed in a rather liberal manner. Parliament obviously intended to bring in cotton yarn, hosiery and rope within the category of textiles by including them in the said clause. It is brought to our notice by Sri Parvatha Rao, learned counsel for the assessee, that the definition of " textile industry " in Ency....