D.N. Sharma, Judicial Member - (1.)THIS appeal filed by the assessee is directed against the order dated 20-2-1987 passed by the CIT(A) for the asst. year 1982-83.
(2.)The first two grounds raised in this appeal dispute the disallowance of the assessee's claim for investment allowance of Rs. 79,069 on new machinery purchased and installed during the year in question. This is the first year of assessment of the assessee which is a private limited company. It was incorporated on 19-8-1980 with the main object of taking over the business of the partnership firm M/s. Softek. The company is a software house specialising in computer programmes for mini and micro computer systems and data processing. In computation of its income for asst. year 1982-83, the assessee claimed investment allowance to the tune of Rs. 79,069 on new machinery purchased, details whereof are as under:-
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The ITO noted in the assessment order that the assessee has not created any reserve during the year as prescribed under the provisions of Section 32A(4)(ii) of the Income-tax Act and, therefore, deduction on account of investment allowance cannot be allowed during the relevant asst. year.

(3.)THE assessee appealed to the CIT(A) who took the view that the computers do not either produce or manufacture any article and that the activities involved therein would fall within the concept of processing of goods, THE CIT( A) further noted that the computers are installed in the office premises and so in view of the provision of Section 32A(l)(a) such machinery and plant installed in office premises are not eligible for deduction of investment allowance. It was further noted that similar is the case in respect of the airconditioner. THE CIT(A) thus confirmed the order of the ITO on the point, though for different reasons. Aggrieved, the assessee has come up in second appeal before the Tribunal.