Prakash Krishna, J. - (1.) The Income Tax Appellate Tribunal, New Delhi 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 on facts and circumstances of the case, the Appellate Tribunal was legally correct in granting investment allowance to the assessee?"
(2.) The dispute relates to the assessment year 1984-85. The assessee, who is an individual, carries on proprietary business in the name of M/s Malhotra Nursing & Maternity Home. The assessee's claim of investment allowance with reference to ultra sound machine equipment shown by the name of Echoscan which is a scanner specially intended for obstetrics and gynaecology was disallowed by the assessing officer. By means of the scanner an image is got on the screen for various purposes relating to the assessment of pregnancy, control of foetus, heart activity, foetus positioning, foetal sex assessment, foetal malformations, biometry etc. The claim of the investment allowance was disallowed by the I.T.O., on the ground that the aforesaid equipment could not be said to be productive of "article" or "thing." In Appeal, the Commissioner of Income Tax (Appeals) accepted the fact that echo scanning equipment in question produces an echo graph, which is like an x-ray machine. Consequently, it directed the Income Tax Officer to verify other conditions prescribed under Section 32-A like creation of reserve etc. and to grant investment allowance accordingly. The Tribunal has upheld the order of the first appellate authority.
(3.) Heard Sri Shambhu Chopra, learned Standing Counsel for the department and Sri R.R. Kapoor and Sri Krishna Agrawal learned counsels for the assessee/respondent.;