COMMISSIONER OF INCOME TAX Vs. CASTLEROCK FISHERIES

JUDGEMENT

(1.) Pursuant to the order passed by this Court in O.P. Nos. 5316 of 1976, 5416 of 1976 and 494 of 1976 filed by the Commissioner of Income tax, Ernakulam, the Income tax Appellate Tribunal, Cochin Bench (hereinafter called the Tribunal) has stated a case and referred the following question to this Court, under S.256(2) of the Income tax Act, 1961 (hereinafter called the Act):

(2.) The assessee is a registered firm dealing in sea foods with its head office in Cochin and a branch at Bombay. The relevant assessment years concerned in these references are 1969-70 and 1970-71, for which the relative periods of account are the years that ended on 31 3 1969 and 31-3-1970 respectively.

(3.) During the accounting year relevant to the assessment year 1969-70 the assessee put up a freezing, cold storage and ice plant at their Bombay branch. But the said plant was temporarily let out by them to a sister concern and the income derived by such letting was treated and assessed as the business income of the assessee for the relevant accounting years. The assessee claimed that they were entitled to development rebate in respect of cold storage and ice plant at 35% as provided for in S.33(1)(b)(B)(i)(a) of the Act. The Income tax Officer allowed development rebate only at 20% on the ground that the assessee bad not been using the plant for processing goods, but had merely let it out. For the assessment year 1970-71 the assessee had claimed rebate in respect of the further addition to the freezing and storage plant put up in the Bombay branch, which also had been let out by the assessee to the same sister concern. Though the claim put forward by the assessee was for the grant of rebate at 35% it was allowed by the Income tax Officer only to the extent of 20% on the same reasoning as was adopted by him while finalising the assessment for the year 1969-70.