JUDGMENT
Mankad, J.
1. The Income-tax Appellate Tribunal (hereinafter referred to as “the Tribunal”) has referred to us the following two questions for our opinion under section 256(1) of the Income-tax Act, 1961 (“the Act” for short) :
“1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in deleting the addition of Rs. 8,508, Rs. 10,460 and Rs. 4,750 for assessment years 1970-71, 1971-72 and 1972-73 respectively on account of disallowance under section 37(2B) of the Income-tax Act, 1961 ?
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the assessee is entitled to development rebate on the lift installed in the block used for research and development on the basis that it is a plant or machinery ?”
2. Out of these two questions, the first question is directly covered by a decision of this court in CIT v. Patel Brothers & Co. Ltd. [1977] 106 ITR 424. Respectfully following the said decision of this court, we answer the first question in the affirmative and against the Revenue.
3. So far as the second question referred to us is concerned, the facts are as follows : The assessee, a public limited company, is engaged in the business of manufacture of electrical equipments such as switch gears, circuit breakers etc., and giving of technical know-how. In the previous year relevant to the assessment year 1970-71, the assessee-company installed a lift in the building exclusively used for research and development. The assessee-company claimed development rebate on the lift. The Income-tax Officer rejected the claim of the assessee-company on the ground that the lift was a part of the building and it could not be treated as plant or machinery. In the alternative, he held that the lift could be treated as machinery for transporting men and materials from one place to another. According to the Income-tax Officer, whether transport was horizontal or vertical, rebate on machinery for transport would not be admissible. In the appeal, the Appellate Assistant Commissioner observed that the Income-tax Officer while emphasising the description of the lift as machinery meant for transport, overlooked the provisions of section 33(1)(a) of the Act which specifically excluded only road transport vehicles from its purview for admissibility of development rebate. The Appellate Assistant Commissioner observed that the Income-tax Officer was technically correct when he said that the lift is used for transporting men and materials, but by no stretch of imagination could it be described as road transport vehicle. According to the Appellate Assistant Commissioner, only road transport vehicles were excluded from the purview of section 33(1)(a) and not any other type of machinery used for transport.. He, therefore, held that the assessee-company was entitled to development rebate on the lift. The Revenue carried the matter in appeal before the Tribunal. The Tribunal agreed with the Appellate Assistant Commissioner that the lift could not be described as a road transport vehicle. The Tribunal further held that the Appellate Assistant Commissioner was right in treating lift as plant or machinery. The Tribunal further observed that applying the test laid down by this court in CIT v. Elecon Engineering Co. Ltd. [1974] 96 ITR 672, the assessee-company was entitled to development rebate on the lift as held by the Appellate Assistant Commissioner. The Revenue feeling aggrieved by the view taken by the Tribunal, the question referred to above has been referred to us at its instance.
4. Section 33(1)(a) under which development rebate is claimed by the assessee-company reads as follows :
“33. (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).”
5. The only grievance made by the Revenue is that the lift cannot be treated as part of the plant as held by the Tribunal. Now, it is clear from the provisions reproduced above that development rebate is admissible in respect of new ship, or new machinery or plant (other than office appliances or road transport vehicles). Therefore, assuming for the sake of argument that lift is not part of the plant, as urged on behalf of the Revenue, it cannot be gainsaid that it is a machinery which was newly installed by the assessee-company in the year under consideration. Lift is a machinery or a mechanical device for transporting men and material from one place to another. It is, therefore, a machinery within the meaning of section 33(1)(a) of the Act. It is not disputed that the lift is used for the purpose of business carried on by the assessee-company. In fact, the Income-tax Officer did not refuse to grant development rebate because it was not wholly used for the purpose of business carried on by the assessee-company. As pointed out above, he rejected the assessee-company’s claim only on the ground that it was machinery used for transporting men and material vertically from one place to another. The machinery used for transporting is not excluded from the application of section 33(1)(a). Only office appliances and road transport vehicles are excluded for the purpose of claiming development rebate. That being the position, in our opinion, the assessee-company is entitled to claim development rebate in respect of the lift as new machinery within the meaning of section 33(1)(a) of the Act. We, therefore, hold that the Tribunal was right in allowing the assessee-company’s claim for development rebate as the lift is a machinery.
6. In the result, we answer the second question also in the affirmative and against the Revenue.
7. Reference answered accordingly with no order as to costs.
8. A copy of this judgment should be sent under the seal of this court and the signature of the Registrar to the Income-tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad.