INSPECTING ASSISTANT COMMISSIONER Vs. R S AVTAR SINGH AND CO
LAWS(IT)-1989-12-16
INCOME TAX APPELLATE TRIBUNAL
Decided on December 08,1989

Appellant
VERSUS
Respondents

JUDGEMENT

Agarwal, Judicial member - (1.)THESE are two appeals by the Revenue arising out of the assessments of the two assessees for assessment year 1978-79. Since the points raised are identical and both the assessees are represented by the same counsel, the appeals were heard together and are hereby disposed of by this common order.
(2.)Assessments of the two assessees were completed in the normal course under Section 143(3). However, the ITO re-opened the assessments under Section 147(b) on the ground that investment allowance under Section 32A was erroneously allowed to the assessees, that are partnership firms carrying on the business as building contractors. The assessees filed returns in pursuance of notice under Section 148 and objected to the reopening of the assessments as well as the proposed withdrawal of investment allowance. However, the ITO framed the assessments enhancing the income of M/s R.S. Avtar Singh & Co. (Delhi) by Rs. 38,120 and that of M/s R.S. Avtar Singh & Co. by Rs. 47,131. These amounts represent investment allowance that was allowed in the original assessments.
The assessees appealed to the CIT (Appeals), who vide identical orders dated 20-10-1986 upheld the reopening of the assessments but held that under the provisions of Section 32A(2)(b)(iii) of the Income-tax Act, 1961 the assessee was an industrial undertaking being engaged in the business of construction and was entitled to investment allowance. The Revenue is now in appeals before us.

(3.)ON behalf of the Revenue the only contention raised is that the assessees being firms, which were engaged in the business of construction of buildings, were not industrial undertakings within the meaning of Section 32A. Under Section 32A(2)(b) an assessee is entitled to investment allowance in respect of the following types of plant and machinery installed after the 31st day of March, 1976:-
(i) for the purposes of business of generation or distribution of electricity or any other form of power; or

(ii) in a small-scale industrial undertaking for the purposes of business of manufacture or production of any article or thing; or

(iii) in any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule.



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