COMMISSIONER OF INCOME TAX Vs. VULCAN LAVAL LIMITED

JUDGEMENT

(1.) THE reference raises four questions at the instance of the Revenue and two questions at the instance of the assessee. The questions read thus:

(2.) IT is, common ground that the 1st and 2nd questions raised by the Revenue must be answered in the affirmative and in favour of the assessee, having regard to this Court's judgment, in CIT vs. Indokem (P) Ltd. (1981) 22 CTR (Bom) 268 : (1981) 132 ITR 125. These questions are answered accordingly.

(3.) THE fourth question raised by the Revenue is contested. The assessee is a limited company and manufactures dairy machinery. It uses durable tools every year in the nature of measuring instruments, standard clamping equipment, cutting tools, jigs and fixtures, individually or in conjunction with other machinery. It was not disputed before the Tribunal that these durable tools had an average life not exceeding 3 years. The assessee claimed development rebate upon these durable tools on the footing that they constituted "plant and machinery". The ITO rejected the claim. The AAC accepted it only in regard to one of the four years involved and the Tribunal accepted it in toto.