- (1.) THE controversy here is with regard to the rate at which the assessee, Ludhiana Steel Rolling Mills, is entitled to development rebate under Section 33 (1) (b) (B) (i) (b) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), namely, whether it should be 15% or 25% ?
(2.) THE business of the assessee-firm consists of rerolling of iron scrap, manufacture of mild steel rounds, square bars and also the manufacture and sale of machinery like lathes, blowers, surface grinders, drills, etc. The assessee is undoubtedly entitled to development rebate at the rate of 15% but if it is held that what it manufactures falls within the ambit of item No. (1) of Schedule V to the Act, the development rebate that the assessee would be entitled to would be not 15% but 25%.
(3.) THE Income-tax Officer rejected the assessee's claim for development rebate at the rate of 25% of the cost of the new plant and machinery under Section 33 (1) (b) (B) (i) (b) of the Act, holding that the articles it manufactured were not covered by item No. (1) of the Fifth Schedule to the Act. This order was later upheld in appeal by the Appellate Assistant Commissioner. The Tribunal, however, took a contrary view and held that the assessee was engaged in the manufacture of iron and steel within the meaning of item No. (1) of the list in the Fifth Schedule to the Act and was thus entitled to development rebate at the rate of 25%. This is what has now led to the following question being referred for the opinion of this court: "whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee is entitled to development rebate at 25% within the meaning of Section 33 (1) (b) (B) (i) (b) of the Income-tax Act, 1961 ?";