Decided on July 30,1982



F.C. Rustagi, Judicial Member - (1.) THE sum and substance of all the six grounds raised by the assessee in this appeal is that assessee's claim of investment allowance has wrongly been rejected by the ITO and also by the Commissioner (Appeals) when the matter went before him.
(2.) The facts pertaining to the issue are in short compass. The assessee is an individual and the assessment year involved is 1977-78 for which the relevant previous year ended on 31-3-1977. The business of the assessee is to purchase tungsten, a heavy metal used for making lamp filaments and manufacture of sets therefrom. When originally the return declaring income of Rs 116 was filed by the assessee before the ITO, no claim in respect of investment allowance was made, though during the relevant accounting year the assessee had added machinery to the tune of Rs. 1,01,799. There is no controversy about the fact that the assessee had not made any provision of statutory reserve in the books of account pertaining to the year under consideration. In course of certain enquiries, the relevant books were required to be produced by the assessee to the Assistant Director of Inspection (Intelligence) and the same were impounded which were ultimately sent to the ITO, Roop Nagar, assessing the assessee. During the course of assessment proceedings, the assessee came forward with a request before the revenue, including the Assistant Director of Inspection (Intelligence) and the ITO, that the relevant books for the year under consideration may be made available to the assessee in order to facilitate the assessee to pass relevant entries pertaining to creation of reserve in respect of investment allowance. This request of the assessee was never accepted and under the circumstances, the assessee filed revised profit and loss account and balance sheet creating investment allowance reserve therein and contended before the ITO that in the light of the ratio of Punjab and Haryana High Court decision in CIT v. Sardar Singh Sachdeva [1972] 86 ITR 387, the assessee's claim of investment allowance be accepted. The ITO rejected the same.
(3.) THEN the matter was carried before the Commissioner (Appeals) with whom as well the contention raised by the assessee did not find favour, as he confirmed the action of the ITO. While doing so, he, however, besides relying upon the judgment of the Hon'ble Supreme Court in the case of Indian Overseas Bank Ltd. v. CIT [1977] 77 ITR 512, also relied on the Explanation to Section 32A(4). Before the Commissioner (Appeals), the assessee also contended that it was against the principles of natural justice that the assessee was denied access to his books by the revenue. The Commissioner (Appeals) observed that such a contention does not arise out of the assessment order and the assessee, if at all had any cause of action, it was on the date when he was refused to have access to the books and the assessee was at liberty to have suitable legal remedy on that date. It is this main action of the Commissioner (Appeals) denying the benefit of investment allowance which is disputed, though the assessee has come forward with many grounds which can to some extent be treated as argumentative and in certain respects the same can be in respect of observations of the Commissioner (Appeals).;

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