Judgment :- R. JAYASIMHA BABU, J. For the asst. yr. 1977-78, the CIT exercised revisional power under s. 263 of the IT Act, 1961, as in his opinion interests of the Revenue had been prejudiced by the order of the ITO, allowing development rebate at the rate of amount of 25 per cent, of the investment. The CIT was of the view that such an allowance was at a rate higher than that at which could have been made. It had been found that installation of machinery for commencement of the manufacturing process prior to 30th June, 1975, had not been established by the assessee satisfactorily before the ITO. The CIT, therefore, directed the ITO to provide an opportunity to the assessee to place further materials and thereafter to decide the question as to whether the development rebate at a higher rate could be claimed by the assessee. The assessee, on appeal before the Tribunal, contended that the CIT should have accepted the material placed before him by the assessee which was a report of the directors and should not have sent the matter back to the ITO. It was also its case that as the assessee had filed an appeal in which it had contended that the development rebate should have been allowed on the advertisement expenses in relation, to the machinery, the order of assessment should be regarded as having merged with the order under appeal thereby depriving the CIT of his revisional jurisdiction. The Tribunal has rejected those contentions of the assessee. The assessee having sought a reference and this Court having issued a direction to make a reference, the reference is now before us. The submissions made are the same as had been urged before the Tribunal. The directors' report produced by the assessee before the CIT does not establish the date of installation of machinery or the date of commencement of production. The statement in the directors' report being not conclusive about the date on which the machinery was installed or of the date on which the production had commenced, the CIT had asked the assessee to produce the relevant certificate issued under the Factories Act which he failed to do. The statement in the directors' report being not conclusive about the date on which the machinery was installed or of the date on which the production had commenced, the CIT had asked the assessee to produce the relevant certificate issued under the Factories Act which he failed to do. The CIT in the interest of justice directed the ITO to provide an opportunity to the assessee to produce all the materials before him and thereafter grant development rebate to the extent the assessee was eligible under law.The CIT in the circumstances has acted properly and there is no illegality in the manner in which he has exercised his power, nor did he lack the jurisdiction to make the order he did. The merger which the assessee contends had taken place as between the order of the assessment, and the order under appeal has been found by the Tribunal to be non-existent as the issue of development rebate was not before the CIT(A). As to whether the amount that had been allowed was the proper amount was not an issue before the CIT. The assessee merely wanted an additional amount to be allowed. The enquiry into that ground did not require any investigation as to the correctness or otherwise of the amount of development rebate that had been allowed on the assumption that the machinery had been installed and the production had commenced before 30th June, 1975. The Tribunal has held that there was no merger and we are in agreement with that view of the Tribunal. In the result, we find that the Tribunal was right in the manner in which it dealt with the appeal and in holding that there was no merger and that there had been prejudice to the interests of the Revenue by reason of the order of the ITO warranting exercise of the power by the CIT under s. 263 of the IT Act. The questions are answered in favour of the Revenue and against the assessee.