- (1.) On an application under Section 250(1) of the Income-tax Act, 1961, the Tribunal has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding' that the assessee was entitled to investment allowance on the machinery acquired for manufacture of ice-cream by taking" a view that ice-cream was not a confectionery and did not fall within items of Schedule 11 to the Income-tax Act, 1961, as a result of which the appellate order of the Commissioner of Income-tax (Appeals) cancelling the order of the Assessing Officer under Section 147(b) was upheld ?"
(2.) The assessee is a private limited company and the method of accounting" adopted was the mercantile system. The original assessment order made under Section 143(3) of the Act, was reopened under Section 147(b) of the Act. During the course of assessment proceedings, the Income-tax Officer took the view that the assessee-company was engaged in the manufacture of ice-cream which was an item of confectionery included in the Eleventh Schedule to the Income-tax Act. Therefore, according to him, the assessee is not entitled for the investment allowance. In the appeal before the Commissioner of Income-tax (Appeals), it was brought to the notice of the Commissioner of Income-tax (Appeals) that in the earlier assessment year, i.e., 1984-85, the claim of the assessee was allowed. Considering that fact, the Commissioner of Income-tax (Appeals) has cancelled the order of the Assessing Officer under Section 147(b) of the Act. The Revenue carried the matter before the Tribunal. The Tribunal has followed its earlier order in the assessment year 1984-85 and upheld the order of the Commissioner (Appeals).
(3.) Learned counsel for the Revenue fairly admits that whether ice-cream is a confectionary or a milk product has been considered in sales tax matters by the Allahabad High Court and the Delhi High Court and a view has been taken that it is a milk product and not a confectionery product.;