Y.R.MEENA,J. - (1.) ON an application under S. 256(2) of the IT Act, 1961, the Tribunal has referred the following question set out at p. 2 of the paper book : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the AO to allow investment allowance on trailers ?"
(2.) THE assessee-company derived income by sale of tea grown and manufactured by it during the previous year relevant to the assessment year under consideration. The AO found on scrutiny of the records and books of accounts produced before the AO that assessee has claimed investment allowance on the plant and machineries employed by the assessee, which includes leaf carrying basket trailers. The ITO did not allow the investment allowance on the leaf-carrying basket trailers on the ground that it does not form part of the machineries and plant. As it does not contribute directly to the manufacturing process of tea, therefore, it cannot be taken as machinery categorised in Appendix I to the IT Rules provided for the rates of depreciation. In appeal before the CIT(A), CIT(A) has also upheld the view taken by the ITO. In appeal before the Tribunal, the Tribunal has held that the trailer employed for carriage of leaves form part of machinery used in integrated business of manufacture and sale of tea. Therefore, the investment allowance on the trailers should not be disallowed. Learned counsel for the Revenue submits that this Court has taken the view that jeeps and motorcycles are not machinery and plant. Therefore, not entitled for investment allowance.
(3.) LEARNED counsel for the assessee Dr. Pal submits that the decision of this Court in case of CIT vs. General Fibre Dealers (P) Ltd. (2000) 164 CTR (Cal) 392 : (2001) 248 ITR 622 (Cal) is distinguishable. As in the case of General Fibre Dealers (P) Ltd. the point was that jeeps and motorcycles were used inside the tea gardens and as well as outside the tea gardens as vehicles. Therefore, it cannot be treated as part of plant and machinery. But in the case in hand the trailers are used only within the tea estate garden. They are never used as vehicles on the road from point to point. Therefore, they form part of the plant and machinery and entitled for investment allowance.;