6. The second and last ground in the assessee's appeal is against the non-allowance of development rebate on cleavage condenser and refrigerator condenser, the respective cost of which was Rs. 7,58,466 and Rs. 69,918. There is no dispute that these two machineries were not actually put into use before 1-6-1975. Observing that by a Notification dated 28-5-1971 the grant of development rebate was discontinued in respect of the plants installed after 31-5-1974 and that the provisions for the grant of development rebate in some exceptional cases in terms of Section 16 of the Finance Act, 1974, were also not applicable in this case, the ITO disallowed the assessee's claim for development rebate. The Commissioner (Appeals) has dealt with this issue in paragraph 7 of his order. He has observed that on carefully going through the reasons recorded by the IAC, he fully agreed with the department's stand in this behalf.
7. It is stated before us by Sri Dastur, the learned counsel for the asses-see, that the abovesaid two machineries are in the nature of spares and that the short question that requires consideration in this case is whether these spares can be said to have been put into use at the time when they are ready for use or whether they would be treated to have been put into use only when the original condensers have given way and these condensers have actually been used in substitute thereof.
In this connection, Sri Dastur explained his client's stand by giving an illustration. He said that a fire extinguisher will have to be treated as in use the moment it is kept ready and not when there is an actual fire and the fire extinguisher has been used to put out the fire. He also gave an example of a stepney in a motor car. The stepney has to be treated as put into use from the date the car is purchased, even though there may not be any necessity for a stepney for a long time. It was pointed out that the assessee's cost of the plant and machinery is of the value of more than crores and, therefore, the departmental authorities are certainly not justified in holding that these condensers could not be said to have been put into use just because the necessity to use them did not arise before 1-6-1975.
Factually, Sri Dastur has admitted that while the bigger condenser was put into use during the month of December 1975, i.e., within the previous year, the other condenser was not actually used during the year at all. The departmental representative has strongly relied on the orders of the IAC and the Commissioner (Appeals).
8. In our opinion, the submission made on behalf of the assessee is well founded. We agree with the assessee's counsel that in a case like this the machinery or plant will have to be treated as put into use the moment it is ready for the use. There then being no dispute that the above two condensers were received by the assessee in the month of April 1975, i.e., before 1-6-1975, and that the other conditions are satisfied, we hold that the assessee is entitled to the development rebate.