SALUJA COLD STORAGE Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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I.S. Nigam, Accountant Member -
(1.) THESE two appeals, filed by the assessee, relating to the assessment years 1979-80 and 1980-81, against the orders of the Commissioner (Appeals)-II, Kanpur, deal with common issues and are, therefore, for the sake of convenience, disposed of by a consolidated order.
(2.) The assessee is a registered firm, which runs a cold storage. Before the ITO it was claimed that the assessee was entitled to investment allowance as laid down by Section 32 A of the Income-tax Act, 1961 ('the Act"), on additions to plant and machinery. This claim of the assessee was, however, not allowed by the ITO. The Commissioner (Appeals) also did not accept this claim of the assessee. The assessee has, therefore, come up with the first common point of dispute in the two appeals before us.
The assessee's learned counsel Shri Gulati submitted to us that the cold storage involves machinery and plant in order to keep the cold storage chamber at a reduced temperature which is controlled by a thermostat and this is enough to show that the cold storage means manufacture or production of goods. Our attention was also invited to the ruling of the Hon'ble Punjab and Haryana High Court in the case of CIT v. Yamuna Cold Storage  129 ITR 728 wherein their Lordships observed that the cold storage was a factory as defined under the Factories Act, 1948, and, therefore, the cold storage can be said to be involved in manufacture. Summing up, Shri Gulati vehemently argued before us that in the instant case it is not under dispute that the assessee is a small scale industry and the only point for consideration on which claim of investment allowance can be refused is whether the assessee manufactures or produces any articles or things and here again in view of the observations of their Lordships of the Hon'ble Punjab and Haryana High Court in the case of CIT v. Yamuna Cold Storage (supra), the second condition is also met. He, therefore, vehemently argued before us that the claim of investment allowance was perfectly justified and was wrongly not allowed by the revenue authorities.
(3.) ON the other hand, the learned departmental representative, Shri Jauhari, pointed out that in the case of CIT v. Yamuna Cold Storage (supra), the issue before their Lordships was whether the cold storage chamber was part of air-conditioning plant of the cold storage or was a godown for the purpose of what rate of depreciation is admissible and, therefore, the ruling of the Hon'ble Punjab and Haryana High Court will not be applicable to the facts of the present case. Our attention was also invited to the words of Section 32A, which lays down that for the grant of investment allowance not only the business should be a small scale industrial undertaking, it should also be of manufacture or produce of any article or thing. Proceeding further, Shri Jauhari submitted that while the function of the cold storage to preserve articles or things for their use at a later date by the scientific process of refrigeration may be a process, it certainly cannot be said to be manufacture or production of goods. He, therefore, vehemently argued before us that the claim of investment allowance was not admissible and was rightly not allowed by the revenue authorities.;
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