A. R. HALDER, J. M. : This appeal by Revenue is directed on ground that CIT (A) erred in allowing adjustment of unabsorbed development rebate for asst. yr. 1972-73 against income of asst. yr. 1979-80 when asset were nationalised in 1972-73. During asst. yr. 1972-73 when assessee-company was engaged in coal mining business it had installed new plant and machinery and as result it become entitled to development rebate under s. 33 of IT Act, 1961. development rebate which was admissible in asst. yr. 1972-73 was not allowed by Revenue and same remained unabsorbed and in asst. yr. 1979-80 assessee-company claimed that unabsorbed development rebate should be carried forward from asst. yr. 1972-73 and should be adjusted with income for asst. yr. 1979-80, now under appeal. Meanwhile, coal mining business of assessee-company was nationalised by The Coal Mines (Nationalisation) Act, 1973 and assessee thus stood stripped of colliery business though it did not become defunct or extinct. In other words, assessee-company continued to be in existence and had income from some other sources of income. assessee s claim for adjustment of unabsorbed development rebate for asst. yr. 1972-73 with income for year under appeal was negatived by ITO on ground that on nationalisation of coal industry business of assessee in coal mining was taken over by government and as such its assets and liabilities vested in government for which assessee was given compensation. According to ITO, as result of nationalisation of coal industry, government under took all responsibility to meet liabilities of coal industry and that fact that company carried on its name as Raneegunge Coal Association Limited was only of academic interest. assessee appealed to CIT (A) and contended that ITO s statement that consequent upon nationalisation of coal industry, all liabilities of assessee-company vested in government was not correct. Reference was made to s. 7(1) of Coal Mines (Nationalisation) Act, 1973 which states that "every liability of owner, agent, manger or managing contractor of coal mine, in respect of any period prior to appointed day, shall be liability of such owner, agent, manger, or managing contractor, as case may be, and shall be enforceable against him and not against Central Government of Government Company". It was argued that development rebate was linked with assets unlike unabsorbed business loss which was linked with business. It was next urged that unabsorbed development rebate was required to be carried forward and adjusted as provided for in s. 33 (2) of Act and there is no provision in Act which states that business in which claim for development rebate arose in earlier year should necessarily be in existence in year in which unabsorbed development rebate is sought to be adjusted. It was also urged that development rebate once held admissible should necessarily be carried forward to extent it remained unabsorbed and only eventuality in which development rebate may be withdrawn has been prescribed in s. 34(3)(b) of Act. But s. 34(3)(b) had no application to situation like present case where machinery or plant was transferred to government vide cl. (ii) of proviso to s. 34(3) (b). It was pointed out that it was not case of withdrawal of development rebate as such, but question of carry forward and adjustment of adjustment of unabsorbed development rebate was involved. CIT (A), after going through provisions of s. 7(1) of Coal Mines (Nationalisation) Act, 1973, and considering facts of case, held that assessee was entitled to set off of unabsorbed development rebate relating to asst. yr. 1972-73 against income computed for asst. yr. 1979-80 by observing as under: "The assessee-company, as already stated above, was no doubt divested of colliery business but fact remains that it continued to be in existence and was also having income from some other sources. Under cl. 3 of Coal Mines (Nationalisation) Act, 1973, right, title and interest of assessee- company in relation to coal mine (s) owned by it vested in government on appointed date i. e., 1st May, 1973 but assessee-company as such was continuing to function. development rebate was introduced for giving incentive to assessee to develop his business. It is concession to assessee and, therefore, unless law specifically so provided it would not be proper to deny benefit to any assessee on basis of assumptions only or by importing any terms and conditions not envisaged in Act itself. It has no where been stated in Act that eligibility for unabsorbed development rebate would depend on continuance of same business which claim for development rebates arose initially. In this connection, it would be relevant to note that where legislature intended otherwise it had in its own wisdom specifically provided for that, vide provisions contained in s. 72(1) relating to carry forward and set off of business losses. Even s. 34 which enumerates condition for inter alia grant of development rebate only contemplates withdrawal of development rebate allowed earlier on infraction of conditions contained in s. 34 (3) (a) but this goes no further and does not say word about unabsorbed development rebate being withheld in any situation or contingency. There is yet another way of looking at matter. Under s. 33(2), amount of development rebate is to be set off against total income of assessee and not merely against profit or gains of particular business in respect of which development rebate is granted and so also development rebate which remains unabsorbed and is carried forward to next assessment year (s) is to be set off not merely against profits or gains of particulars business but against total income of assessee for that year. Thus, it is evident development rebate is not necessarily linked with business in which it initially arose and benefit of unabsorbed development rebate would be available for set off against total income of assessee. In present case, unabsorbed development rebate pertaining to asst. yr. 1972-73 has remained unadjusted and there was income available in asst. yr. 1979-80 as per computation made by ITO himself. Therefore, for reasons stated earlier, I think assessee is entitled to set off unabsorbed development rebate relating to asst. yr. 1972-73 against income computed for asst. yr. 1979-80. In this context. I should also mention that provisions of Act appear to be in favour of assessee and even assuming there is some ambiguity interpretation favourable to assessee should be accepted, according to well known Rule of Interpretation of fiscal statue." Against said order of CIT (A) Revenue has come up in appeal Against said order of CIT (A) Revenue has come up in appeal before us and it was contended by Departmental Representative that by virue of nationalisation of coal industry under provisions of Coal Mines (Nationalisation) Act, 1973 existing colliery business was entirely taken over by government for which assessee was given compensation. He, therefore, urged that business for which assessee was entitled to development rebate for asst. yr. 1972-73 ceased to exist. He urged that mere fact that assessee-company was carrying on business other than coal industry in name of Raneegunge Coal Association Limited was not enough to come to conclusion that assessee was entitled to set off its unabsorbed development rebate which arose in colliery business. He relied on decision of Punjab & Haryana High Court in case of Indian Motors Transport Co. (P) Ltd. (1974) 95 ITR 73 (P & H). He also referred to provisions of s. 34(3) (a) of Act and urged that deduction referred to in s. 33 shall not be allowed unless amount equal to 75per cent of development rebate to be actually allowed is debited to P & L A/c of relevant previous year and credited to reserve account to be utilised by assessee during period of eight years next following for purposes of business of undertaking. ld. counsel for assessee, on other hand, reiterated same contentions as were advanced before CIT (A). He invited our attention to relevant provisions of Coal Mines (Nationalisation) Act, 1972 to show that government took over assets of company but liabilities were not taken over., he urged that development rebate is required to be carried forward and adjusted as provided for in s. 33(2) of Act. He also urged that there is no provision in Act which states that business in which claim for development rebate arose in earlier year should necessarily be in existence in year in which unabsorbed development rebate is sought to be adjusted. According to him, once development rebate is held to be admissible should necessarily be carried forward to extent it remained unabsorbed. He also took us through provisions of s. 155 (5) (i) of Act which refers to transfer of asset to any person other than government. local authority, corporation established by Central, State or Provincial Act or government company. He, Therefore, submitted that in view of clear provisions of this section, although assets of assessee were taken over by government, assessee was entitled to benefit of adjustment of unabsorbed depreciation for earlier year with income for assessment year under appeal. ld. counsel for assessee also contended that even though colliery business of assessee was taken over by government but assessee was found to have been carrying on business under its existing trade name. He, therefore, wanted us to uphold order of CIT (A). We have heard submissions of both parties and considered facts on record. There is no dispute about fact that even after nationalisation of coal industry assessee was carrying on business and earning income therefrom. ITO negatived assessee s claim for adjustment of development rebate for earlier year against income for current year on ground that on nationalisation of coal industry assets and liabilities of assessee-company vested with government for which assessee was awarded compensation and that assets for which development rebate arose had already been taken over by government. In our opinion, reason given by ITO is not sound one. Sec. 33 (2) (ii) of IT Act, 1961 provides for carry forward of unabsorbed amount of development rebate to following year or years. relevant section reads as under: "(ii) amount of development rebate, to extent of which it has not been allowed as aforesaid, shall be carried forward to following assessment year, and development rebate to be allowed for following assessment year shall be such amount as is sufficient to reduce total income of assessee assessable for that assessment year, computed in manner aforesaid, to nil, and balance of development rebate, if any, still outstanding shall be carried forward to following assessment year and so on, so, however, that no portion of development rebate shall be carried forward for more than eight assessment year immediately succeeding assessment year relevant to previous year in which ship was acquired or machinery or plant installed or immediately succeeding previous year, as case may be." It, therefore, follows that if total income of assessee for year of installation is nil or less than full amount of development rebate, amount of development rebate, to extent to which it is not absorbed, may be carried forward to following year and set off against total income of assessee for that year and even thereafter part of development rebate remains unabsorbed balance outstanding may be carried forward to following year and so on for aggregate period not exceeding eight year. Reference may be made to decision of Supreme Court in case of Rajalayam Mills Ltd. vs. CIT, Madras 1978 CTR (SC) 16: (1978) 115 ITR 777 (SC) wherein it has been made clear that if any part of development rebate remains unabsorbed, it is to be set off against other income of assessee under any of chargeable heads and it is only if some part of development rebate still remains outstanding that it can be carried forward to following assessment years and set off against total income of assessee for that year, amount of development rebate is to be set off against total income of assessee and not merely against profits or gains of particular business in respect of which development rebate is granted and so also development rebate which remains unabsorbed and is carried forward to next assessment year is gains of particulars business but against total income of assessee for that year. It would, therefore, be seen that it is only where amount of development rebates has not been fully set off against total income of assessee in past assessment years and part of it still remains unabsorbed and is carried to assessment year in question that it can be allowed against profits or gains of business for particular assessment year and if there is still some balance outstanding then against other income of assessee for that assessment year, It is, therefore, clear that allowance of development rebates is not linked with business in which it initially arose. Sec. 7 (1) of Coal Mines (Nationalisation) Act, 1973, as mentioned herein before, goes to suggest that even after nationalisation of colliery business assessee remained responsible for liability of business in respect of period prior to nationalisation. In that view of matter, it has to be held that colliery business did not cease to exist. Having regard to legal and factual aspects of matter, we have no hesitation to hold that assessee was entitled to benefit of set off of unabsorbed development rebate relating to asst. yr. 1972-73 against income computed for assessment year under appeal. In view of our aforesaid observations, we consider it unnecessary to discuss decision relied upon by ld. Departmental Representative. We, therefore, uphold order CIT (A). In result, Departmental appeal is dismissed. *** INCOME TAX OFFICER v. RANEGUNGE COAL ASSOCIATION LIMITED