Judgment

Bharucha, J.-The basic questions with which we are concerned in these appeals, relating to the Assessment Year 1976-77, read thus :

“(i) Whether on the facts and in the circumstances of the case, was the Tribunal right in holding that the Commissioner of Income Tax had jurisdiction u/s 263 of the Income Tax Act to revise the order of the Income Tax Officer passed after obtaining directions from the Inspecting Assistant Commissioner under Section 144B of the Act?

(ii) Whether on the facts and in the circumstances of the case, was the Appellate Tribunal right in law in holding that assessment year 1975-76 is the 8th assessment year immediately succeeding the assessment year 1967-68 for the purpose of carry forward and set off of unabsorbed development rebate under Section 33(2)(ii) of the Act and not the assessment year 1976-77?

(iii) Whether on the facts and in the circumstances of the case the Appellate Tribunal right in holding that for the purpose of carry forward of 80J relief the assessment year 1975-76 is the 4th assessment year immediately succeeding the assessment year 1971-72 and not the assessment year 1976-77?

(iv) Whether the Tribunal was right in holding that as far as the assessee was concerned it cannot be said that the assessment year 1975-76 did not exist or was not there?

(v) Whether the Tribunal was right in holding that the applicant is not entitled to deduction of the provision for gratuity?”

2. Learned counsel for the assessee had not pressed by argument in relation to questions 1 and 5 and, therefore, we do not deal there­with.

3. For the purposes of questions 2, 3 and 4, Sections 33 and 80J need to be quoted :

“33. Development rebate:-(1)(a) In respect of a new ship or new machinery or plant (other than office appliances or road transport vehicles) which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section and of Section 34, be allowed a deduction, in respect of the previous year in which the ship was acquired or the machinery or plant was installed or, if the ship, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, a sum by way of development rebate as specified in clause (b).

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(2) In the case of a ship acquired or machinery or plant installed after the 31st day of December, 1957, where the total income of the assessee assessable for the assessment year relevant to the previous year in which the ship was acquired or the machinery or plant insttalled or the immediately succeeding previous year, as the case may be (the total income for this purpose being computned without making any allowance under sub-section (1) or sub-section (1A) of this section or sub-section (1) of Section 33A or any deduction under Chapter VI-A or Section 280-O is nil or is less than the full amount of the development rebate calculated at the rate applicable thereto under sub-section (1) or sub-section (1A), as the case may be,-

(i) the sum to be allowed by way of development rebate for that assessment year under sub-section (1) or sub-section (1A) shall be only such amount as is sufficient to reduce the said total income to nil; and

(ii) the amount of the development rebate, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development rebate to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable for that assessment year, computed in the manner aforesaid, to nil, and the balance of the development rebate, if any, still oustanding shall be carried forward to the following asssessment year and so on, so hoever, that no portion of the development rebate s