The disallowance of development rebate under Section 33 (6) of the Income-tax Act, 1961, applies only to plant and machinery installed in the office premises or residential accommodation of the assessee concerned, and not to plant and machinery installed in the office premises or residential accommodation of persons other than the assessee.

AJIT K. SENGUPTA, J.

( 1 ) THIS reference at the instance of the Revenue under Section 256 (1) of the Income-tax Act, 1961, relates to the assessment years 1972-73 and 1. 973-74. The common question of law referred to this court is as follows :"whether, on the facts and in the circumstances of the case, and on a correct interpretation of Section 33 (6) of the Income-tax Act, 1961, development rebate is allowable in respect of meters installed in the residential premises and office premises of the consumers ?"

( 2 ) THE facts leading to this reference are that the assessee is an electric supply undertaking. It supplies electricity to its customers. For the purpose of measuring the quantity of electricity consumed, meters belonging to the assessee are fixed at the office premises and residential accommodation of the consumers. Accordingly, in the course of the assessment proceedings, the assessee claimed development rebate in respect of such meters and the Income-tax Officer allowed the same. The Commissioner of Income-tax thought that the Income-tax Officer wrongly allowed the development rebate inasmuch as the meters were installed in the office premises or residential accommodation and, as such, the claim is not allowable in view of Sub-section (6) of Section 33 of the Income-tax Act, 1961. Accordingly, he directed withdrawal of development rebate for the two years under appeal.

( 3 ) ON appeal, the Tribunal held that the assessee is entitled to development rebate on the meters which belonged to the assessee but not installed in the office premises or residential accommodation of the assessee and accordingly vacated the orders made by the Commissioner under Section 263 of the Act.

( 4 ) AT the hearing, it has been contended on behalf of the Revenue that the meters were installed in the office premises or residential accommodation and, accordingly, the benefit of development rebate cannot be allowed to the assessee. On the other hand, the contention of Dr. Pal, on behalf of the assessee, is that so long the meters are not installed by the assessee-company in its own office premises or in the residential accommodation belonging to the assessee-company, development rebate cannot be denied to the assessee.

( 5 ) WE have given our anxious consideration to the respective contentions. The substantive part of Section 33 (6) of the Income-tax Act, 1961, provides as follows :"notwithstanding anything contained in the foregoing provisions of this section, no deduction by way of development rebate shall be allowed in respect of any machinery or plant installed after the 31st day of March, 1965, in any office premises or any residential accommodation, including any accommodation in the nature of a guest-house. "

( 6 ) THE only question which calls for determination is whether, on a proper construction of Sub-section (6) of Section 33 and in the context of the opening words of that section, the expression "any office premises or any residential accommodation" would cover only the office premises or the residential accommodation of the assessee or in the assessee's occupation but the office premises or residential accommodation of persons other than the assessee as well.

( 7 ) THE assessee is an electric supply undertaking. Under Section 20 (2) of the Indian Electricity Act, 1910, the assessee is under a statutory duty to supply energy to its consumers. The meters in question installed by the assessee-company are, admittedly, plants of the assessee-company. The object of Sub-section (6) of Section 33 is no doubt to discourage the assessee from claiming development rebate of plant and machinery such as air-conditioners, frigidaires, room heaters, electric fans, etc. , and other similar machinery in their own office premises and residential accommodation. It is not the intention that the development rebate would be disallowed where the said plant or machinery is installed in any office premises or residential accommodation of any person

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