RAJES KUMAR,J. - (1.) THE present appeal under Section 260A of the IT Act (hereinafter referred to as 'the Act') is directed against the order of the Tribunal, dt. 24th Aug., 2001 for the asst. yr. 1988 -89. The aforesaid appeal has been admitted on the following questions: 1. Whether, the Hon'ble Tribunal was justified in holding that the assessee's claim to the extent of Rs. 4,31,459 was allowable under Section 32AB, without appreciating the fact that para 17.3 of Circular No. 461 was only applicable when a deposit was made with a 'designated development bank', and not otherwise?
(2.) WHETHER , the Hon'ble Tribunal was justified in following the decision of the Bombay High Court in the case of CIT v. Antifriction Bearings Corporation Ltd. : [2000]246ITR295(Bom) , without considering the full text of the Circular No. 461, thus leading to a question whether for purposes of interpretation of a provision, a circular has to be read in entirety, or only part portions thereof can be used to interpret a particular provision? 2. The brief facts of the case giving rise to the present revision are that the opposite party (hereinafter referred to as 'assessee') claimed deduction Under Section 32AB on investment of Rs. 24,95,914 out of which Us. 20,88,000 was deposited with IDBI on 15th June, 1988. The balance was claimed to be invested in the purchase of plant and machinery. On examination of the details furnished before the assessing authority, he found that the assessee had made some additions to plant and machinery, but the new plant and machinery was purchased for Rs. 8,854 only, whereas the assessee had claimed deduction for investment in plant and machinery to the tune of Rs. 4,31,459 and the amount of Rs. 8,854 was not included in the figure of Rs. 4,31,459. After considering the version of the assessee, the assessing authority held that there was no purchase of plant and machinery by the assessee and as the assessee had not utilized the amount in purchase of new machinery and plant, the deduction was not allowable under Section 32AB. He also observed that even if the assessee might have acquired new plant and machinery in the subsequent year, it cannot be said that the assessee has utilized the amount in the purchase of plant and machinery in the previous year relevant to asst. yr. 1988 -89. Thus, according to him, the deduction under Section 32AB cannot be allowed to the extent of plant and machinery, which were not purchased in this year. Thus, the AO held that only amount of Rs. 20,88,000 deposited by the assessee with IDBI, qualified for deduction of 20 per cent of the profit after depreciation, whichever is less. In appeal, it was submitted before the learned CIT(A) by the assessee that even if the delivery of the plant and machinery was taken in subsequent year, the amount was utilized by making actual payment to the supplier in the year under consideration. The CIT(A), however, did not agree with the contentions raised before him. He upheld the action of the assessing authority. He, therefore, confirmed the action of the assessing authority and upheld the disallowance of Rs. 4,31,459.
(3.) BEING aggrieved by the order of the CIT(A), assessee filed appeal before Tribunal. The Tribunal by the impugned order accepted the plea of the assessee and allowed the claim. Tribunal held as follows: We have carefully considered the facts and circumstances relating to this issue, the case law to our attention was invited and the rival submissions. The legal position about the applicability of Section 32AB, stands settled in view of the decisions referred to by the learned Counsel for the assessee. In the case of Asstt. CIT v. Dr. V.M. Iyer , it was held that where the assessee had purchased machinery for use in operation theatre against which he paid advance during previous year and balance in the next year, when machinery was delivered, assessee's claim for deduction was to be allowed. Pune Bench in the above case observed that Section 32AB(1)(b) lays down emphasis on utilization of amount for the purchase of machinery during the previous year rather than actual purchase of machinery, which can follow utilization of amounts. In view of this legal position, the finding of the CIT(A) is set aside. Hence that the claim of the assessee is to be allowed, if the assessee succeeds in showing that the amount in question was utilized by him by making payments for purchasing plant and machinery in the previous year relevant to the assessment year under consideration. However, the fact relating to such payments have to be ascertained. Hence while agreeing with the assessee, in principle, that the amount spent or paid for purchasing plant and machinery should be considered as utilized in view of the provisions contained under Section 32AB, we restore the matter to the AO to examine the details of such payments and to consider the claim of the assessee accordingly, as per law.;