Decided on May 04,1994



J. KATHURIA, A.M. : - (1.) THE only issue in this appeal by the assessee for asst. yr. 1986-87 is whether the assessee firm was entitled to investment allowance on fork-lift crane or not.
(2.) Brief facts in this regard are these. The assessee-firm is running a rolling mill at Mandi Gobindgarh, manufacturing steel strips. During the year relevant to asst. yr. 1986-87, the assessee purchased a tractor-mounted crane at a cost of Rs. 5,95,220. Investment allowance of Rs. 1,48,805 on the same was claimed. The Assessing Officer, however, noticed that the assessee had earned an income of Rs. 79,283 by doing the labour jobs of loading and unloading of material in the stock-yard of Steel Authority of India Ltd. and Punjab Small Industries and Export Corporation Ltd. by utilising the aforesaid crane. He, therefore, observed that the crane had not been used wholly for the manufacturing business of the assessee as it had been mostly used for earning income by doing loading and unloading of materials of outside parties. Without prejudice to this, the Assessing Officer, however, held that the crane had the character of a transport vehicle on which no investment allowance was admissible. He accordingly rejected the claim of investment allowance preferred by the assessee. The learned CIT(A) considered the main ground that the crane was not being used wholly for the manufacturing business of the assessee. The learned CIT(A) did not consider whether the crane was a transport vehicle or not. The Revenue has not come before us by way of a cross appeal or cross objection. We have, therefore, to dispose of this case on the basis of the matter having been disposed of by the learned CIT(A).
(3.) SHRI K.P. Bajaj, the learned Counsel for the assessee, submitted that the plain reading of S. 32A(1) showed that the plant or machinery on which investment allowance was claimed should be used wholly for purposes of the business carried on by the assessee. Inviting our attention to sub-s. (2) of S. 32A, it was submitted that the assessee who was small scale industrial undertaking had put up the business of manufacture of production of any article or thing with the machinery on which investment allowance was claimed. It was pointed out that in S. 32A(2)(b)(ii) of the Act, the word "wholly" was conspicuous by its absence. The submission, therefore, was that the requirement of law for the allowance of claim under S. 32A of the Act was that the machinery should be owned by the assessee and should be wholly used for purposes of business carried on by the assessee but that it was not necessary that the machinery should be so used wholly for purposes of business of manufacture or production of any article on thing. Relying on the Special Bench decision of the Tribunal in ITO vs. First Leasing Co. of India Ltd. (1985) 23 TTJ (Mad) 469 (SB) : (1985) 13 ITD 234 (Mad)(SB), it was submitted that even in the case of a leasing company, investment allowance was held to be admissible whereas in the present case, the assessee was only utilising the machinery when it was lying idle with the purpose to make optimum use of the machinery and to earn maximum profit therefrom. It was also submitted that the expression, "for the purposes of business" was wider than the expression "for the purposes of business of manufacture or production of any article of thing". It was, therefore, submitted that the assessees case was squarely covered by the provisions of law and hence investment allowance was admissible to the assessee, because all other conditions stood satisfied in this case.;

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