N.N.Sharma, J. - (1.) This reference under Section 256, Sub-clause (1), of the I.T. Act, is being disposed of by this order. It was initiated by the Commissioner of income-tax and arose out of the Tribunal's order in Income-tax Appeals Nos. 1502 and 1503 (Allahabad) of 1972-73. The following two questions have been referred to this court : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee's claim for development rebate in respect of assets installed up to September 30, 1968, was rightly considered by the Appellate Assistant Commissioner in the assessment year 1970-71, even though this claim had been rejected by the Income-tax Officer in the assessment order for 1969-70 and the grounds raised by the assessee had been treated as irrelevant by the Appellate Assistant Commissioner while disposing of the appeal for that year? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in upholding the Appellate Assistant Commissioner's order allowing the assessee's claim of development rebate of Rs. 5,52,247 in the assessment years 1970-71 and 1971-72?"
(2.) The facts as gathered from the statement of the case briefly stated are that assessee is a company running a Five Star Hotel known as Clark Shiraz at Agra. The assessment years under consideration are assessment years 1970-71 and 1971-72. The respective accounting years ended on September 30, 1969, and September 30, 1970. The dispute relates to the assessee's claim for development rebate on plant and machinery installed up to September 30, 1968.
(3.) It appears that the assessee-company was incorporated in 1961. It suffered losses in the initial years of its business and for the first time made some profit in the accounting year ending on September 30, 1968, which was the previous year for assessment year 1969-70. The assessee claimed development rebate in respect of the various items of plant and machinery acquired by it up to September 30, 1968, for the first time in assessment year 1969-70. The total claim was for Rs. 5,53,400 out of which Rs. 3,89,993 were claimed in the assessment year 1969-70. The balance amount of Rs. 1,63,407 was claimed in assessment year 1970-71.;