The development rebate is for a new ship, new machinery, or new plant that belongs to the assessee but is not an office appliance or a road vehicle. According to and subject to the requirements of this section and section 34, a deduction shall be given for the prior year in which the ship or machinery was purchased or installed. The development rebate must be calculated in accordance with subsection (2)’s rules as though it were a ship or piece of machinery, and for the purposes of that subsection, the assessee’s profit or loss on that ship or piece of machinery must be considered to be a distinct line of business.
When the entire revenue of the assessee assessable for the assessment year is less than the whole amount of the development rebate, Section 33(2) states that the ship was acquired or the machinery or plant installed after December 31, 1957.
When a ship, machine, or plant for which a development rebate has been granted to the amalgamating firm under subsection (1) or subsection (3) is sold or otherwise transferred to the merged company as described in subsection 3 of a scheme for amalgamation (1A).
According to subsection 4, the provisions of clauses (a) and (b) of sub-section (3) shall, to the extent possible, apply to the firm and the company when a firm is succeeded in the business it conducts by a company, as a result of which the firm sells or otherwise transfers any ship, machinery, or plant to the company.
In accordance with subsection 5, the Central Government may, if it deems it necessary or advantageous to do so, direct that the deduction allowed under this section not be allowed in respect of a ship acquired or machinery or plant installed after such date, not being earlier than three years from the date of such notification, as may be specified therein.