Dr. B.P Saraf, J.:— By this reference under section 256(1) of the Income-tax Act, 1961, made at the instance of the Revenue, the following question of law has been referred by the Income-tax Appellate Tribunal to this court for opinion:

“Whether, on the facts and in the circumstances of the case, the assessee-company was entitled to development rebate on machinery and plant installed in the year ending 30th June, 1974, relevant to the assessment year 1975–76 ?”

2. The material facts are as under:

The assessee is a limited company. It was incorporated on June 21, 1975. It became a partner in a firm styled Lokmat on July 1, 1973. The firm used to close its accounts every year on June 30. On December 31, 1973, the firm was dissolved and the assessee-company took over all its assets and liabilities as on December 31, 1973. The assessee-company closed its accounts on June 30, 1974.

In the course of proceedings for assessment of its income for the assessment year 1975–76 relevant to the accounting year ended on June 30, 1974, the assessee-company claimed development rebate of Rs. 1,40,028. on the cost of machinery worth Rs. 9,33,528. The order for the above machinery was placed with a foreign concern by the firm, Lokmat on June 10, 1973. The machinery was, however, actually received and in-stalled by the assessee-company after it had taken over the business of the firm with effect from December 31, 1973, and became the sole pro-prietor thereof. This claim of the assessee was allowed by the Income-tax Officer in its assessment for the assessment year 1975–76.

Subsequently, the Commissioner of Income-tax scrutinised the relevant assessment records of the assessee and, being of the opinion that the assessee-company was not entitled to development rebate in view of Section 16(c) of the Finance Act, 1974, initiated proceedings under section 263 of the Act and after hearing the assessee, passed an order directing the Income-tax Officer to withdraw the development rebate of Rs. 1,40,028, which, according to him, had been erroneously allowed by him.

The assessee-company appealed to the Income-tax Appellate Tribu-nal (“the Tribunal”) against the above order of the Commissioner passed in exercise of the power of suo motu revision. The contention of the assessee-company before the Tribunal was that the contract for the purchase of machinery had been entered into by the firm with the manufacturer or owner of the machinery before the stipulated date which was Decem-ber 31, 1973. As the assessee had acquired the business of the said firm along with all its assets and liabilities including its rights under the aforesaid contract in terms of the above contract, the machinery was pur-chased by it and installed in its business. According to the assessee, the expression “assessee” appearing in Section 16(c) of the Finance Act, 1974, includes the predecessor-in-business of the assessee. On the other hand, the contention of the Revenue before the Tribunal was that the assessee-company itself having not entered into any contract for the purchase of the machinery in question on or before the stipulated date, it was not eligible for the benefit of development rebate on the strength of Section 16(c) of the Finance Act, 1974. This contention of the Revenue did not find favour with the Tribunal. The Tribunal accepted the contention of the assessee and observed that the requirement of Section 16(c) of the Finance Act, 1974, was that the order should be placed prior to December 1, 1973. On that being done, the first requirement of Section 16(c) of the Finance Act, 1974, would be fulfilled. The Tribunal, therefore, set aside the order of the Commissioner of Income-tax and restored the order of the Income-tax Officer allowing development rebate in respect of the machinery in question. Hence, this reference at the instance of the Revenue.

3. For a proper appreciation of the controversy before us, it may be expedient to refer briefly to the scheme of section 33 of the Income-tax Act, 1961 (“the Act”), notification of the Central Government discontinu-ing the grant of development rebate in respect of machinery installed after May 31, 1974, and the effect of Section 16(c) of the Finance Act, 1974, allowing continuance of development rebate in certain cases in respect of machinery installed by the assessee between June 1, 1974, and June 1, 1977, despite the above notification.

4. Section 33 provides for allowance on account of development rebate, inter alia, in respect of machinery installed by the assessee in the previous year on the fulfilment of the conditions specified therein. Sub-section (5) thereof empowers the Central Govern-ment to discontinue the giving of benefit of development rebate in respect of machinery installed after a specified date. In exercise of this power, the Central Government issued Notification No. S.O 2167 (see [1971] 81 ITR (St.) 45), dated May 28, 1971, discontinuing the grant of development rebate in respect of machinery or plant installed after May 31, 1974. This notification reads (see [1974] 94 ITR (St.) 46):

“In exercise of the powers conferred by sub-section (5) of section 33 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby directs that the deduction in respect of development rebate under section 33 of the said Act shall not be allowed in respect of a ship acquired or machinery or plant installed after the 31st day of May, 1974.”

5. The benefit of development rebate was, however, continued by section 16 of the Finance Act, 1974, for further periods specified therein, despite withdrawal of the same by the Central Government by the above notifi-cation under section 33(5) of the Act. Section 16 of the Finance Act, so far as relevant, reads:

“16. Continuance of development rebate in certain cases. — The notification of the Government of India in the Ministry of Finance (Depart-ment of Revenue and Insurance) No. S.O 2167, dated the 28th day of May, 1971, issued under sub-section (5) of section 33 of the Income-tax Act shall not apply in respect of,—

(a) any ship acquired after the 31st day of May, 1974, but before the 1st day of June, 1975, by any assessee, if the assessee furnishes evi-dence to the satisfaction of the Income-tax Officer that he had, before the 1st day of December, 1973, entered into a contract for the purchase of such ship with the builder or owner thereof;

(b) 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 the 31st day of May, 1974, but before the 1st day of June, 1977.

Explanation.— In this clause, ‘equipment’ means a boiler, fur-nace, kiln, oven or the like.

(c) any machinery or plant [not, being machinery or plant referred to in clause (b)] installed by any assessee after the 31st day of May, 1974, but before the 1st day of June, 1975, if the assessee furnishes evidence to the satisfaction of the Income-tax Officer that before the 1st day of December, 1973, he had purchased such machinery or plant or had entered into a contract for the purchase of such machinery or plant with the manufacturer or owner of, or a dealer in such machinery or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant.”

(emphasis* supplied).

6. Thus, section 33 of the Act which provides for the allowance of deve-lopment rebate, the notification of the Central Government which with-draws the same in respect of machinery installed after May 31, 1974, and Section 16(c) of the Finance Act, 1974, which provides for the continuance of the same despite the above notification in cases which fulfil the require-ments specified therein should all be read together to ascertain whether the assessee is eligible for development rebate in respect of a particular machinery. The position that emerges from such a reading can be summed up thus:

1. Development rebate is allowable to an assessee in respect of new machinery or plant installed in the relevant previous year on the fulfilment of certain conditions, (vide section 33 of the Income-tax Act).

2. It was discontinued in respect of machinery installed after 31st May, 1974. (vide Notification dated 28th May, 1971, issued under section 33(5) of the Act).

3. Despite discontinuance by notification dated 28th May, 1971, development rebate continued to be admissible in respect of machinery or plant installed after 31st May, 1974, but before 1st June, 1975, if the assessee had before 1st December, 1973:

(i) either purchased the machinery or plant; or

(ii) had entered into a contract for the purchase of such mac-hinery or plant from the manufacturer or owner thereof or a dealer therein, (vide Section 16(c) of the Finance Act, 1974).

7. In the instant case, the uncontroverted factual position is that the contract for the purchase of the machinery was entered into with the manufacturer by the partnership firm on June 10, 1973, even before the assessee-company came into being on its incorporation on June 21, 1973. It became a partner of the firm, which had placed the order for the machinery in question, only thereafter. It was with effect from December 31, 1973, that the assessee-company took over the assets and liabilities of the said firm on its dissolution. It is obvious from the above that no contract for the purchase of the machinery in question had been entered into by the assessee-company. It is also not possible in this case to treat the contract entered into by the partnership firm on June 10, 1973, to be a contract entered into by the assessee-company, as the assessee-company had not even come into existence on that date.

8. In view of the above discussion and the clear language of Section 16(c) of the Finance Act, 1974, we find it difficult to agree with the Tribunal that to avail of the benefit of Section 16(c) of the Finance Act, 1974, it is sufficient that the order for purchase of the machinery is placed before the specified date and that it is immaterial as to who placed the order— the assessee or its predecessor-in-interest. Section 16(c) of the Finance Act clearly requires that the benefit of continuance of development rebate would be available only if the assessee furnishes evidence to the satisfac-tion of the Income-tax Officer that “he had entered into a contract” for the purchase of such machinery on or before December 1, 1973. In the instant case, admittedly, the order for purchase of machinery was not placed by the assessee-company. It was not even in existence at that time. Nor was it placed by the partnership firm of which he was a partner and on its dissolution took over the assets and liabilities thereof. The order was placed by a firm with which the assessee was not connected in any manner. Even if that were so, the first requirement for the continuance of development rebate would not have been fulfilled. From the language and object of Section 16(c) of the Finance Act, 1974, it is clear that the requirements specified therein are mandatory which must be fulfilled to avail of the benefit of the special provision contained therein. In the present case, these requirements having not been fulfilled, the assessee-company was not entitled to development rebate in respect of the machinery in question.

9. Counsel for the assessee submitted before us that Section 16(c) of the Finance Act, 1974, having been incorporated for the benefit of the assessee, it should be construed liberally. We do not find any merit in this sub-mission. We have observed in a catena of decisions that the principle of beneficial or liberal interpretation cannot be applied to stretch or pervert the clear language of an enactment. Principles or rules of interpretation are not rules of law. They serve as guides in the interpretation of pro-visions of law which are vague or ambiguous. They are merely aids to construction or interpretation of statutes and should not be treated as masters. They can be discarded or ignored, if the facts and circumstances so require, and new rules of interpretation may be evolved as and when necessary to meet new or unique situations.

10. Having regard to the above discussion and the reasons set out above, we are of the clear opinion that the assessee-company is not entitled to development rebate on the basis of the special provision contained in Section 16(c) of the Finance Act, 1974. The question referred to us is, therefore, answered in the negative and in favour of the Revenue.

11. Under the facts and circumstances of the case, we make no order as to costs.