Bharucha, J. - (1.) 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 under Section 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 was 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 has not pressed any 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). ********** (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 installed or the immediately succeeding previous year, as the case may be (the total income for this purpose being computed without making any allowance under sub-section (1) or sub-section (1-A) 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 outstanding shall be carried forward to the following assessment year and so on, so however, that no portion of the development rebate shall be carried forward for more than eight assessment years immediately succeeding the assessment year relevant to the previous year in which the ship was acquired of the machinery or plant installed or the immediately succeeding previous year, as the case may be." "80-J. Deduction in respect of profits and gains from newly established industrial undertakings or ships or hotel business in certain cases. - (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking on a ship or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains (reduced by the deduction, if any, admissible to the assessee under Section 80HH) of so much of the amount thereof as does not exceed the amount calculated at the rate of six per cent, per annum on the capital employed in the industrial undertaking or ship or business of the hotel, as the case may be, computed in the prescribed manner in respect of the previous year relevant to the assessment year (the amount calculated as aforesaid being hereinafter, in this section, referred to as the relevant amount of capital employed during the previous year.) Provided that in relation to the profits and gains derived by an assessee, being a company from an industrial undertaking which begins to manufacture or produce articles or to operate its cold storage plant or plants after the 31st day of March, 1976, or from a ship which is first brought into use after that date, or from the business of a hotel which starts functioning after that date, the provisions of this sub-section shall have effect as if for the words 'six per cent', the words 'seven and a half per cent', had been substituted. (2) The deduction specified in sub-section (1) shall be allowed in computing the total income in respect of the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or to operate its cold storage plant or plants or the ship is first brought into use or the business of the hotel starts functioning (such assessment year being hereafter, in this section, referred to as the initial assessment year) and each of the four assessment years immediately succeeding the initial assessment year." (Emphasis supplied) ;