JUDGMENT
1. The Income-tax Appellate Tribunal, Delhi Bench "C", Delhi, has referred the following questions of law for opinion of this court that arose out of its order in I. T. A. No. 124 (Delhi) of 1979 for the assessment year 1975-76 :
"1. Whether the Tribunal was right in holding that the assessee was engaged in the manufacture of iron and steel (metal) within the meaning of item No. 1 to the Fifth Schedule of the Act ?
2. Whether, on the facts and in the circumstances of the case, the assessee was entitled to development rebate at a higher rate of 25 per cent, under Section 33(1)(b)(B)(i) of the Act ?"
2. The facts that were not in dispute and have been accepted by the Tribunal are that the assessee is a private limited company carrying on the business of manufacture of iron plates from ingots purchased by it from the open market. It claimed that it was manufacturing iron and steel (metal) as stated in item No. 1 of the Fifth Schedule to the Income-tax Act, 1961, and was entitled to higher development rebate under Section 33 of the Act. The Income-tax Officer negatived the assessee's claim on the reasoning that the assessee-company was engaged in re-rolling and not in the manufacture and production of iron and steel. On appeal, the Commissioner of Income-tax (Appeals) accepted the assessee's contention and the Commissioner's second appeal was rejected by the Tribunal that has referred these questions for opinion of this court at the instance of the Commissioner of Income-tax.
3. We have heard Sri Ashok Kumar, learned counsel for the Commissioner of Income-tax. No one has appeared on behalf of the assessee.
4. Sri Ashok Kumar, learned counsel for the Revenue, brought to our notice a judgment of the Supreme Court in CIT v. Krishna Copper and Steel Rolling Mills [1992] 193 ITR 281. That was also a case in which the assessees were manufacturing mild steel rods, bars and rounds out of steel ingots manufactured by others. The Supreme Court examined the entire procedure of the production of iron and steel and came to the conclusion that bars, rods and rounds, etc., produced from steel ingots or billets are only finished forms of the metal and not articles made of iron and steel and they only constitute raw material for putting up articles of iron and steel such as grills or windows by applying to them processes such as cutting or turning. The Supreme Court also found that if the mill that was manufacturing ingots or billets used those things for further manufacture of bars, rods and rounds, etc., the manufacturer will be entitled to higher development rebate on the machinery and plant used in the rolling mill and that there was no reason why the same benefit should be denied when the re-rolling is done by other manufacturers. In our view, the reasoning adopted in the aforesaid case by the Supreme Court equally apply to the present case and the Tribunal was right in holding that the assessee-respondent who was manufacturing iron plates from ingots purchased from the market was manufacturing iron and steel (metal) within the meaning of item No. 1 of the Fifth Schedule to the Income-tax Act, 1961, and was entitled to higher development rebate of 25 per cent. We, therefore, answer the aforesaid question in the affirmative, in favour of the assessee-respondent and against the Revenue.