- (1.) THE Income Tax Appellate Tribunal, Allahabad has referred the following question of law under section 256(1) of the Income Tax Act, 1961, hereinafter referred to as the Act, for opinion to this Court. 'Whether, the Income Tax Appellate Tribunal was, in law, justified in holding that the assessee was eligible for investment allowance under section 32A(2)(iii) of the Income Tax Act, 1961?'
(2.) THE present Reference relates to the assessment years 1978 -79 and 1979 -80. Briefly stated the facts giving rise to the present Reference are as follows : The respondent -assessee is a State Government undertaking. It is engaged in business of construction of bridges etc. It claimed investment allowance which was rejected by the Assessing Authority on the ground that it was not an industrial undertaking where the plant and machinery were installed for the purpose of business of construction, manufacture or production of any article or thing. The order was set aside by the Commissioner of Income Tax (Appeals) who had held that the investment allowance is admissible. In further appeal the Tribunal has upheld the order of the Commissioner of Income Tax (Appeals).
(3.) IN view of the decision of the Apex court in the case of CIT v. N.C. Budharaja and Co. : [1993]204ITR412(SC) , the persons who are engaged in construction activities do not produce any article or thing so as to entitle them for claiming investment allowance under section 32A of the Act. Thus, the Tribunal was not justified in allowing the investment allowance to the respondent -assessee.;