Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1979-80, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the business carried on by the assessee in its computer division with the aid of computer system is an industrial undertaking which satisfies the conditions contained in Section 32A(2)(b)(iii) of the Income-tax Act, 1961?"
(2.) Shortly staled, the facts are that the assessee-company claimed investment allowance on new plant and machinery installed in the computer division of the assessee-company. A sum of Rs. 99,006 consisting of Rs. 89,762 being the investment allowance was claimed in respect of Madras Computer Centre and Rs. 9,244 relating to the machinery installed in the Calcutta Computer Division. The Income-tax Officer, following the assessment order for the assessment year 1975-76, held that the computer being in the nature of an office appliance is not entitled to the investment allowance under Section 32A(2)(b) of the Act.
(3.) The Commissioner of Income-tax (Appeals ), while agreeing with the Income-tax Officer that the computer being in the nature of office appliance also, held that the Computer Division of the assessee-company is not an industrial undertaking and that the conditions prescribed by Section 32A(2)(b)(iii) of the Act have not been fulfilled.;