| Case ID |
04f66bb9-8a4e-4572-bb00-e9b5d790d2bc |
| Body |
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| Case Number |
CASE REFERRED No. 62 OF 1977 |
| Decision Date |
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| Hearing Date |
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| Decision |
The Tribunal was right in holding that the assessee, a manufacturer of cotton yarn, falls within clause 32 of the Fifth Schedule to the Income-tax Act, thereby being entitled to a development rebate at the rate of 25%. The interpretation of the law was clarified to include cotton yarn, hosiery, and rope within the category of textiles, affirming the assessee's claim against the Department's contention that only textiles made wholly or mainly of cotton would qualify for the higher rebate. The ruling emphasized a liberal construction of the relevant legislative provisions. |
| Summary |
In the case of Jeevan Reddy, J. vs. Vijaya Spinning Mills Ltd., the court examined the entitlement of a cotton yarn manufacturer to a development rebate under the Income-tax Act, 1961. The case revolved around whether the manufacturing of cotton yarn fell under item 32 of the Fifth Schedule, which grants a higher rebate for certain textile industries. The assessee claimed a 25% rebate on newly purchased machinery, asserting that their operations qualified under the specified clause. The Income Tax Officer (ITO) had initially ruled against this claim, allowing only a 15% rebate. However, both the Appellate Assistant Commissioner (AAC) and the Tribunal sided with the assessee, leading to the reference for judicial clarification. The court ultimately ruled in favor of the assessee, citing the broader interpretation of textiles to include cotton yarn, thereby affirming the entitlement to the higher rebate rate. This case underscores the importance of legislative interpretation and the need for a liberal approach in tax law, particularly in the context of development incentives for manufacturing industries. Keywords relevant to this case include 'development rebate', 'income-tax', 'textiles', 'cotton yarn', and 'legal interpretation'. |
| Court |
Commissioner of Income Tax
|
| Entities Involved |
assessee-company
|
| Judges |
Jeevan Reddy, J
|
| Lawyers |
M. Suryanarayana Murthy for the Applicant,
S. Parvatha Rao for the Respondent
|
| Petitioners |
Not available
|
| Respondents |
Vijaya Spinning Mills Ltd.
|
| Citations |
1983 SLD 1233,
(1983) 143 ITR 64
|
| Other Citations |
Not available
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
33(1)(b)(B)(i)
|