Judgment :- VARADARAJAN, J. The question referred by the Tribunal, Madras 'B' Bench, under s. 256(1) of the IT Act, 1961 for the opinion of this Court is this : "Whether development rebate allowed in respect of the assets pertaining to the new industrial undertakings established during the previous year for the asst. yr. 1963-64 should be deducted in computing the profits and gains for purpose of relief under s. 84 ?" * The assessees are Mettur Chemical and Industrial Corporation, Ltd. Engaged in the manufacture and sale of heavy chemicals, vanaspathi, vegetable products and soap. They claimed rebate under s. 84 of the Act on Rs. 1, 59, 052. In arriving at that figure the assessees had not computed the income of the industrial undertakings, as provided for under Chapter IV-D. The assessees claimed relief of Rs. 21, 323/- in respect of new caustic soda plant II year. The ITO disallowed the claim on the ground that the development rebate exceeds the profit as per calculation. The assessees claimed development rebate on Rs. 77, 691/- on account of stable bleaching plant No. 2 IV year. The ITO disallowed the claim on Rs. 861/- The assessees claimed rebate on Rs. 13, 489/- on account of the hydrochloric acid plant III year. The ITO found that the development rebate allowable for the assessment year was Rs. 43, 181/-, but disallowed the claim in full on the ground that the development rebate exceeds the profit as per computation. The assessees claimed rebate on Rs. 28, 448/- on account of potassium chloride plant III year. The ITO allowed rebate on Rs. 27, 528/-. Thus the amount on which development rebate was allowed by the ITO amounted to Rs. 1, 04, 353/-. On appeal the AAC agreed with the ITO and upheld his order disallowing the claim for development rebate in part, following the order of the Tribunal for the earlier assessment year in I.T.A. Nos. 230 and 231 dt. 6th August, 1965. On a further appeal, the Tribunal upheld the order of the AAC repelling the contention urged on behalf of the assessees that having regard to the scheme of s. 33 relating to the allowance of development rebate, viz. 230 and 231 dt. 6th August, 1965. On a further appeal, the Tribunal upheld the order of the AAC repelling the contention urged on behalf of the assessees that having regard to the scheme of s. 33 relating to the allowance of development rebate, viz. That it has to be adjusted in any year against the total income and that in case it exceeds the total income, the excess is to be carried forward for being set off and deducted in the next assessment year development rebate is an adjustment to be made only to the total income and not to the income from the business of new industrial undertaking as such, and held thus : "Under s. 84(1) the income to which the exemption thereunder is available is to be included in the total income. But the only concession is that tax is not be charged on such income. The determination of the amount of such income to which the concession is made applicable is again dependent on two variables. One of them is the capital referable to the new industrial undertaking as provided under Rule 19 and the other is the income from the industrial under taking itself. The concession is restricted to business income upto six per cent of the capital. The capital is to be determined not in the commercial sense but as provided under r. 19 and the business income is to be determined not in the commercial sense but as provided in chapter IV-D (vide sub-s. (5) of s. 84) Now it will be seen that the development rebate is an adjustment to be made under s. 32 falling under Chapter IV-D. It is not possible to say that this is an adjustment only relating to the total income and not to the business income as such" * This Court has held in Mettur Chemical and Industrial Corporation vs. CIT, Madras-1 1977 CTR(Mad) 29 : 107 1977 ITR 352. That the effect of s. 84(5) is to allow the relief under that provision only in a case where there was positive income of the industrial undertaking after the allowance of the development rebate. That the effect of s. 84(5) is to allow the relief under that provision only in a case where there was positive income of the industrial undertaking after the allowance of the development rebate. Following this decision, we hold that the assessees' contention that the development rebate should not be deducted in computing the profits and gains from the new industrial undertakings for the purpose of grant of rebate under s. 84 is not tenable and answer the question referred in this case against the assessees and in favour of the Revenue. The assessees will pay the Revenue's costs. Advocate's fee Rs. 250/-. A copy of this opinion, signed by the Register will be forwarded to the Tribunal, Madras 'B' Bench under the seal of this Court.