BRIJESH KUMAR, J. - (1.) THIS is an application under Section 256(2) of the Income -tax Act, 1961, with a prayer that a show -cause notice be issued to the respondents, as to why the question of law formulated or arising out of order dated March 27, 1997, passed by the Income -tax Appellate Tribunal, Guwahati Bench, Guwahati, in ITA No. 175 (Gau) of 1993, be not submitted to this court for opinion, after hearing the parties.
(2.) THE brief facts of the case are that the respondent -assessee filed the return of income for the assessment year 1989 -90 and claimed deduction of investment allowance under Section 32A of the Income -tax Act in respect of ultrasound medical diagnostic electronic equipment, servo -voltage stabiliser and air -conditioner. The Assessing Officer by order dated March 30, 1992, disallowed the claim of investment allowance holding that the ultrasound diagnostic medical equipment is utilised for observing and studying the internal organs of the human body. It only displays internal human organs on the screen, but no new article is manufactured or produced which may have a distinctive name, character and use. Aggrieved by the order passed by the Assessing Officer, the respondent preferred an appeal which was allowed by the Deputy Commissioner of Income -tax (Appeals), Guwahati Bench, Guwahati, vide order dated September 23, 1993. Relying upon certain decisions on the point, the appellate authority accepted the contentions of the assessee -respondent holding that the ultrasound machine is an electronic unit consisting of various apparatus which includes a computer, a display screen and ultra -sound generating equipment which has to be installed in a dust proof air -conditioned room. The appellate authority also made the following observations : 'Ultra -sound uses high frequency sound waves beyond the audible level. The sound is reflected from different depths within the body and the computer converts the signals into a picture produced on the screen, it is operated by a qualified specially trained medical doctor. After the imprint is taken on the raw film, the film is taken to a dark room for further processing to get the final product, i.e., the positive print.' The Revenue preferred an appeal against the order of the Deputy Commissioner of Income -tax (Appeals) before the Income -tax Appellate Tribunal, Guwahati Bench, Guwahati. The appeal was, however, dismissed by order dated March 27, 1997. The Appellate Tribunal observed that the first appellate forum has considered the facts and has given reasoning and the natural function of the asset in respect of which investment allowance was claimed, which was not controverted by the Revenue. It relied upon the decision of the Rajasthan High Court, reported in CIT v. Trinity Hospital . Feeling satisfied by the order passed by the Deputy Commissioner of Income -tax (Appeals), the Tribunal upheld the same. The Revenue moved an application under Section 256(1) of the Income -tax Act for referring the question of law for the opinion of this court. The question formulated for reference is as follows : 'Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in allowing investment allowance on ultrasound medical diagnostic electrical equipment, air -conditioner and servo -voltage stabiliser ?'
(3.) THE application under Section 256(1) of the Income -tax Act moved by the Revenue was rejected by order dated August 27, 1997. While doing so, the Tribunal also observed that the decision of the Rajasthan High Court in the case of Trinity Hospital , was considered and no decision taking a contrary view was shown. The present application, as indicated earlier, has been moved under Section 256(2) of the Income -tax Act.;