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Judgment
G.T. Nanavati, J.—This reference is made by the Tribunal at the instance of the Revenue and the assessee. The following three questions have been referred at the instance of the Commissioner :
"1. Whether, on the facts in the circumstances of the case, the Tribunal was right in holding that the transfer of development rebate reserve to the general reserve would not amount to the utilisation of the development rebate reserve for any of the prohibited purpose under sub-s. (3) of s. 34 of the Act ?
Whether, the Tribunal was right in law in holding that the assessee was entitled to development rebate of Rs. 1,89,517 in the year under consideration ?
Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that roads would come under the head ''plant'' and would qualify for allowance of depreciation ?
The following two questions are referred at the instance of the assessee.
Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that on acquisition of assets of the value of more than the development rebate reserve, without making any entry in development rebate reserve account, it could not be held that the same was utilisation of development rebate reserve for the said purpose ?
Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to weighted deduction under s. 35B of the Act in respect of expenditure of Rs. 23,475 ?"
When this reference was taken up for hearing, the learned counsel for the assessee stated that he is not pressing question No. 5. We, therefore, need not answer the same.
Question Nos. 1, 2 and 4 pertain to development rebate. The question which arise for consideration in that behalf are now covered by the judgment of this Court in IT Ref. No. 8/79 [since reported as CIT vs. Karamchand Premchand (P) Ltd. Almost identical questions were referred in that reference, except that the amount of development rebate was different. They have been decided in favour of the assessee. Following the judgment delivered by this Court in that case, questions Nos. 1 and 2 are answered in the affirmative, i.e., against the Revenue and in favour of the assessee and question No. 4 is answered in the negative against the Revenue and in favour of the assessee.
Question No. 3 also will have to be decided in favour of the assessee, as this Court in IT Ref. No. 227/78 since reported as [Synbiotics Ltd. vs. CIT ] has held that roads are to be treated as building. Question No. 3 is, therefore, answered in the affirmative, i.e., against the Revenue and in favour of the assessee.
We decline to answer question No. 5 as that has not been pressed by the assessee. This reference is disposed of accordingly with no order as to costs.