H.N. Seth, J.
1. At the instance of assessee, M/s. R. S. G. Conduits and Tubes (P.) Ltd., Kanpur, the Income-tax Appellate Tribunal, Allahabad Bench, has, in respect of the assessee's assessment for the assessment year 1973-74, stated the case and referred the following question of law for the opinion of this court:
'Whether, on the facts and in the circumstances of the case, the assessee-company was entitled for higher rate of development rebate at 25%, being priority industry within the meaning of item No. 7 of Schedule V?'
2. The assessee is a private limited company which manufactures conduit pipes and tubes. The ITO, while completing the assessment for the year 1973-74, allowed development rebate at 15% only. The assessee preferred an appeal before the AAC and contended that as the machinery and plant for which the assessee was claiming development rebate had been installed by it for the purposes of business of manufacturing an article mentioned in Schedule V to the I.T. Act, it was, under Section 33(1)(b)(B)(i)(b) entitled to rebate at the rate of 25%. The AAC observed that the past history of the assessee-company showed that it was a priority industry and that the conduit pipes manufactured by it came under item No. 7 of Schedule V to the I.T. Act. He accordingly directed the ITO to allow development rebate to the assessee at the rate of 25%. Being aggrieved, the department took the matter in second appeal before the Income-tax Appellate Tribunal, Allahabad.
3. Before the Tribunal the assessee placed strong reliance on the orders passed by the ITO and the AAC for the assessment year 1972-73, wherein it was held that it was entitled to development rebate under Section 33(1)(b)(B)(i) of the I.T. Act. The assessee also relied upon a certificate which had been issued to it from the Ministry of Commerce and Industries wherein it was mentioned that the assessee had been registered under the provisions of Section 10 of the Industries Development and Regulation Act of 1951, as an industry under the head 'Machinery and Equipment for Generation, Transmission and Distribution of Electric Energy.'
4. The Tribunal opined that an industry engaged in the manufacture of equipments for the generation and transmission of electricity including transformers, cables and transmission towers described in item No. 7 of Schedule V would be entitled to development rebate in accordance with Section 33(1)(b)(B)(i) of the I.T. Act. However, it held that the articles manufactured by the assessee, namely, conduit pipes, were used only for the purposes of holding the cables through which electricity passed and as such it could not be termed as an equipment for the transmission of electricity. In the result it allowed the department's appeal in this regard and restored the order of the ITO.
5. The main question that arises for consideration before us is whether or not the conduit pipes manufactured, by the assessee, which are used for housing electricity cables, can be described as equipment for the transmission of electricity. In common parlance any article which would be required for effectively transmitting electrical energy from one place to another would be considered to be an equipment for the transmission of electricity even though the medium through which the electricity flows or is transmitted is an equipment required for the transmission of energy, but it does not mean that the expression is confined only to such medium. Any article through which the electrical energy does not flow but which is used to secure the medium through which the electricity actually flows in such a way that the medium may be properly used for the transmission of electricity would also be an equipment for the transmission of electricity. We have no reason to think that the word 'equipment' for the transmission of electricity in item No. 7 of Schedule V of the I.T. Act has been used in a sense other than the popular sense mentioned above.
6. As pointed out by the Tribunal the conduit pipes manufactured by the assessee are meant to be used for holding the cables through which the electricity actually flows. It is thus apparent that the conduit pipes are required, so that the electricity may be properly transmitted through the cables used in it. Viewed in this light it is obvious that the conduit pipes manufactured by the assessee are to be considered as equipment for the transmission of electricity.
7. Learned counsel for the department contended that conduit pipes can be used for a variety of other purposes as well. In the circumstances it will not be proper to say that they are equipments for the transmission of electricity. We are not impressed by this argument. Electricity cable, which undoubtedly is an equipment for the transmission of electricity, can also be put to various uses other than the carriage of electricity through it ; merely because it can be put to other uses it does not mean that it ceases to be an equipment for the transmission of electricity. In this regard the object with which and the dominant purpose for the manufacture of such articles and the common use to which they are put has to be considered. While observing that the conduit pipes manufactured by the assessee which are meant for housing the electricity cable, the Tribunal did not refer to any evidence indicating that such conduit pipes are normally used for a purpose other than housing electricity cables. The certificate under Section 10 of the Industries (Development and Regulation) Act, 1951, issued by the Govt. of India to the assessee in the year 1954 also indicates that the Govt. of India considered that the conduit pipes manufactured by the assessee were such which were normally used in connection with the transmission of electric energy.
8. In these circumstances we are of opinion that the conduit pipes manufactured by the assessee can be considered to be equipment for the transmission of electricity and the assessee's case squarely fell within the ambit of Section 33(1)(b)(B)(i) of the I.T. Act and that it was entitled to the higher rate of development rebate at 25%. The question referred to this court is accordingly answered in the affirmative and in favour of the assessee who shall be entitled to costs assessed at Rs. 250.