Pathak, J. - (1.) These appeals by special leave are directed against the judgment of the High Court of Punjab and Haryana holding that the sale of insulated copper wires manufactured by the appellant-assessee does not entitle it to the benefits conferred by Ss. 33(l)(iii)(c)(A) and 80E of the Income-tax Act, 1961 for the assessment years 1966-67 and 1967-68 and the benefits conferred by Ss. 33(l)(b)(B)(i) and 801 of the Income-tax Act, 1961 for the assessment years 1968-69 - to 1971-72.
(2.) Section 33 of the Income-tax Act, 1961 provides for the grant of development rebate. Prior to April 1, 1968. S. 33 (1) (iii)(c) (A) of the Income-tax Act, 1961 provided: (1) In respect of a new ship acquired or new machinery or plant (other than office appliances or road transport vehicles) installed after the 31st day of March, 1954, which is owned by the assessee and is wholly used for the purposes of the business carried on by him, a sum by way of development rebate, equivalent to - (i) and (ii) ............ (iii) in the case of machinery or plant installed after the 31st day of March, 1961- (a) and (b) ...................... (c) where the machinery or plant is installed after the 31st day of March, 1965- (A) for the purposes of business of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule,- (a) thirty-five percent, of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and (b) twenty-five per cent, of such cost, where it is installed after the 31st day of March 1970, (B) .................... shall, subject to the provisions of S. 34, be allowed as 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." This provision was substituted, with effect from April 1, 1968, by the present provision which reads: "33(l)(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 a 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). (A) ..................... (B) in the case of machinery or plant,- (i) where the machinery or plant is installed for the purposes of business of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule,- (a) thirtyfive per cent of the actual cost of the machinery or plant to the assessee, where it is installed before the 1st day of April, 1970, and (b) twentyfive per cent of such cost, where it is installed after the 31st day of March, 1970. These provisions relate to development rebate.
(3.) A deduction was also available to an assessee in respect of profits and gains from specified industries in the case of certain companies prior to April 1, 1968. Section 80E provided: "80E (1). In the case of a company to which this section applies, where the total income (as computed in accordance with the other provisions of this Act) includes any profits and gains attributable to the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule, there shall be allowed a deduction from such profits and gains of an amount equal to eight per cent thereof, in computing the total income of the company." Section 80E was deleted with effect from April 1, 1968 and was substituted by S. 801 which provides: "80-I (1). In the case of a company to which this section applies, where the gross total income includes any profits and gains attributable to any priority industry, there shall be allowed, in accordance with and subject to the provisions of this section. a deduction from such profits and gains of an amount equal to eight per cent, thereof, in computing the total income of the company." It is not disputed between the parties that the assessee is a company to which the provisions of S. 80E and subsequently of S. 80I will apply. Section 80I, it may be noted, was deleted by the Finance Act, 1972 with effect from April 1, 1973. With effect from April 1, 1968 the expression 'priority industry' was defined in S. 80B (7) as meaning: "the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule or the business of any hotel where such business is carried on by an Indian company and the hotel is for the time being approved in this behalf by the Central Government." The word 'Sixth' was substituted for 'Fifth' by the Finance Act 1968 with effect from April 1, 1969.;