Dr. B.P Saraf, J.:— By this reference under section 256(1) of the Income-tax Act, 1961 (“the Act”), the Income-tax Appellate Tribunal, Bombay Bench ‘B’, Bombay (“the Tribunal”), has referred the following two questions of law to this court for opinion:

“1. Whether, on the facts and in the circumstances of the case, the claim of the assessee for allowance of development rebate of Rs. 3,50,128 for the assessment year 1975–76 has been rightly rejected?

2. Whether, on the facts and in the circumstances of the case, the claim of the assessee for allowance of investment allowance of Rs. 31,000 for the assessment year 1977–78 has been rightly rejected?”

2. The material facts giving rise to this reference are as follows: The assessee is a private limited company. This reference pertains to the assessment years 1975–76 and 1977–78. By a deed of sale dated February 28, 1977, effective from March 1, 1977, the assessee-company sold its entire business undertaking consisting of Sarabhai M. Chemical Division, Systronics Division and Telerad Division and Sarabhai Electronics Research Centre Division to Ofisade Pvt. Ltd.

3. The assessee had been allowed development rebate of Rs. 3,50,128 in the assessment year 1975–76 in respect of plant and machinery installed by it in the above business. Similarly, the assessee had been allowed investment allowance in the assessment year 1977–78 in respect of new plant and machinery installed in the above undertaking during the previous year relevant to the said assessment year. On the sale of the business by the assessee on March 1, 1977, the Income-tax Officer invoked the provisions of section 34(3)(b) and section 155(5) of the Income-tax Act and withdrew the development rebate of Rs. 3,50,128 allowed in the assessment year 1975–76. Similarly, the Income-tax Officer, by order under section 155(4A) read with section 32A(5) of the Act, with-drew the investment allowance of Rs. 31,000 allowed in the assessment year 1977–78. The assessee appealed to the Commissioner of Income-tax (Appeals). It was contended by the assessee before the Commissioner (Appeals) that section 155 of the Act had no application to the case of the assessee where the entire business was sold by it as a going concern. According to the assessee, section 155(4a) or section 155(5) applied only to a case where the individual plant and machinery were sold separately. The Commissioner (Appeals) accepted this contention of the assessee and held that as the assessee had sold the entire business as a going concern, there was no sale or transfer of any plant and machinery, dismembered or disassociated from the industrial undertaking. In that view of the matter, the Commissioner (Appeals) cancelled both the orders passed by the Income-tax Officer and allowed the appeals of the assessee. The Revenue appealed to the Tribunal against the order of the Commissioner (Appeals). The Tribunal considered the provisions of sections 34(3)(b) and 155(5) and also sections 32A(5) and 155(4A) of the Act and observed that these provi-sions provide for withdrawal of development rebate or investment allow-ance in a case where the machinery is sold or otherwise transferred within the stipulated period. The Tribunal held that the above provisions would come into play as soon as plant and machinery is sold or otherwise transferred. The Tribunal did not accept the contention of the assessee that in a case where the entire business is sold as a going concern, including the plant and machinery on which the development rebate and investment allowance were previously allowed, there is no sale or transfer of machinery. The Tribunal held that the sale of the whole of the undertaking obviously includes a part thereof since it cannot be said that when the whole undertaking had been sold, the machinery comprised therein remained unsold. The Tribunal, therefore, upheld the action of the Income-tax Officer withdrawing the development rebate and the investment allowance by invoking the provisions of sections 155(5) and 155(4a) of the Act and set aside the order of the Commissioner (Appeals). Hence, this reference at the instance of the assessee.

4. Mr. Mehta, learned counsel for the assessee, submits that in the instant case, the assessee having sold the entire business undertaking consisting of a number of devices as a going concern, the provisions of sections 155(5) and 155(4a) have no application because, in such a case, according to him, the machinery as such is not sold or otherwise transferred which is a condition precedent for the withdrawal of the development rebate. We have carefully considered this submission. Section 34(3)(b) and section 155(5) of the Act, so far as relevant, at the material time, stood as under:

“34. (3)(b) If any ship, machinery or plant is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired or installed, any allowance made under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (XI of 1922), in respect of that ship, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5) of section 155 shall apply accordingly:

Provided that this clause shall not apply,—

(i) where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1958; or

(ii) where the ship, machinery or plant is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); or

(iii) where the sale or transfer of the ship, machinery or plant is made in connection with the amalgamation or succession, referred to in sub-section (3) or sub-section (4) of section 33.”

“155. (5) Where an allowance by way of development rebate has been made wholly or partly to an assessee in respect of a ship, machinery or plant installed after the 31st day of December, 1957, in any assessment year under section 33 or under the corresponding provisions of the Indian Income-tax Act, 1922 (XI of 1922), and subsequently—

(i) at any time before the expiry of eight years from the end of the previous year in which the ship was acquired or the machinery or plant was installed, the ship, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government….

(ii) at any time before the expiry of the eight years referred to in sub-section (3) of section 34, the assessee utilises the amount credited to the reserve account under clause (a) of that sub-section—

(a) for distribution by way of dividends or profits; or

(b) for remittance outside India as profits or for the creation of any asset outside India; or

(c) for any other purpose which is not a purpose of the business of the undertaking,

the development rebate originally allowed shall be deemed to have been wrongly allowed, and the Income-tax Officer may, notwithstanding anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the previous year in which the sale or transfer took place or the money was so utilised.”

5. The provisions of sections 32a(5) and 155(4a) which are applicable to the assessment year 1977–78, so far as relevant at the material time, stood as under:

“32A. (5) Any allowance made under this section in respect of any ship, aircraft, machinery or plant shall be deemed to have been wrongly made for the purposes of this Act,—

(a) if the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which it was acquired or installed; or ……

and the provisions of sub-section (4A) of section 155 shall apply accordingly.”

“155. (4A) Where an allowance by way of investment allowance has been made wholly or partly to an assessee in respect of a ship or an aircraft or any machinery or plant in any assessment year under section 32A and subsequently—

(a) at any time before the expiry of eight years from the end of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed, the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee to any person other than the Government, a local authority, a corporation established by a Central, State or Provincial Act or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or in connection with any amalgamation or succession referred to in sub-section (6) or sub-section (7) of section 32A; or ……

the investment allowance originally allowed shall be deemed to have been wrongly allowed, and the Income-tax Officer may, notwith-standing anything contained in this Act, recompute the total income of the assessee for the relevant previous year and make the necessary amendment; and the provisions of section 154, shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned,—

(i) in a case referred to in clause (a) from the end of the pre-vious year in which the sale or other transfer took place.;……”

6. The language of the above provisions is clear and unambiguous. The intention of the Legislature is to withdraw the benefit of development rebate given to the assessee in respect of certain machinery if such machinery is sold or “otherwise transferred” by the assessee within the stipulated period. The expression “otherwise transferred” is a very wide expression and takes within its sweep transfer of the assets from the assessee to some other person by any means or mode whatsoever. There can be no controversy about the fact that, as a result of the sale of the business undertaking of the assessee as a whole as a going concern, the machinery in question also got transferred to the purchaser of the busi-ness, viz., Messrs. Ofisade Pvt. Ltd. That being so, the provisions of sections 34(3)(b), 155(5), 32A(5) and 155(4A) are squarely attracted and the Income-tax Officer, in such an event was justified in withdrawing the development rebate and investment allowance allowed to the assessee in respect of such machinery.

7. In view of the above, both the questions referred to us are answered in the affirmative and in favour of the Revenue. In the facts and circumstances of the case, there shall be no order as to costs.