Ajit K.Sengupta, J. - (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment years 1978-79 and 1979-80, the following questions of law have been referred to this court : The common questions for the assessment years 1978-79 and 1979-80 are as follows : " 1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the preparation of food in hotel was manufacture or production of articles of the nature as envisaged in Section 32A of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in allowing investment allowance to hotel although the Tribunal itself held that the hotel was not primarily an industrial undertaking ?"
(2.) The additional question for the assessment year 1978-79 is as follows : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the luxury tax liability of earlier years arose or accrued in the accounting year in which the provisional assessment for the luxury tax for such earlier years was passed although the statute for luxury tax came into force prior to the accounting year of the said earlier years ?"
(3.) The facts relating to this reference are that the assessee runs a five star hotel in Calcutta styled as "Hotel Hindustan International". The assessee claimed in the revised return for the assessment year 1978-79 and in the original return for the assessment year 1979-80 investment allowance of Rs. 1,04,663 and Rs. 58,412 on plant and machinery said to have been installed during those years respectively. For that purpose the necessary reserve was also created. However, the Income-tax Officer did not allow investment allowance under Section 32A of the Income-tax Act, 1961, since, according to him, the business of hotel which was being carried on by the assessee in these years was not in the nature of an industrial undertaking as it did not manufacture or produce any article or thing.;