prpri Circular No. 170-Income Tax dated 30-6-1975 Circular No. 170-Income Tax dated 30-6-1975

273. Continuation of development rebate in certain cases – Explanation to section 16(b) of the Finance Act, 1974 – “Coal-fired equipment” includes producer gas plants

1. Reference is invited to Notification No. SO 2167, dated 28-5-1971 [printed above], of the Government of India, Ministry of Finance (Department of Revenue & Insurance), under which the deduction in respect of development rebate under section 33 was not to be allowed in respect of a ship acquired or machinery or plant installed after May 31, 1974.  However, section 16 of the Finance Act, 1974 provided that the said Notification shall not apply, inter alia, in respect of any machinery or plant being coal-fired equipment or any machinery or plant for converting oil-fired equipment into coal-fired equipment, installed by any assessee after May 31, 1974, but before June 1, 1977.  The term “equipment” has been explained to include a boiler, furnace, kiln, oven or the like.

2. I am directed to say that the Board had occasion to examine whether producer gas-fired kiln, furnace, etc., can technically be regarded as coal-fired equipment and thereby covered within the meaning of section 16 of the Finance Act, 1974.  The Board is advised that producer gas is produced by passing steam over burning coal and in view thereof producer gas-fired kiln, furnace, etc., can be regarded as coal-fired equipment within the meaning of the Explanation to section 16(b) of the Finance Act, 1974.  Accordingly, the provision in section 16 of the Finance Act, 1974 relating to extension of development rebate in respect of coal-fired equipment will apply to producer gas-fired kiln, furnace, etc., as well.

Circular : No. 170 [F. No. 202/35/75-IT(A-II)], dated 30-6-1975.

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