- (1.) THE following questions of law have been referred for our opinion by the Tribunal, Chandigarh Bench, arising out of its "(1) Whether, on the facts and in the circumstances of the case and on a proper interpretation of the provisions of the law, the Tribunal was right in law in allowing the assessee's claim for investment allowance on the following : (i) Outgoing switchboards in the Madras Vanaspati Unit; (ii) Electric machinery worth Rs. 2,22,129 installed in the Solvent Unit. (2) Whether, on the facts and in the circumstances of the case and on a proper interpretation of the IT Act/Rules, the Tribunal was right in law in allowing extra shift allowances on new electric installations in fully -fashioned unit, Ludhiana, as also on additions to the machinery made on the last date of the year ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction of Rs. 33,996 on account of sales -tax liability of M/s Gulab Chand Rattan Lal on sales effected in an earlier year ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing the assessee's claim for Rs. 1,03,796 on account of undischarged/disputed liability for electricity charges ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the assessee's claim to the extent of Rs. 12,000 out of disallowance of Rs. 33,492 towards cost of wall clocks, despite the fact that the claim remained unproved and even details concerning their distribution was not furnished -
(2.) WE have heard learned counsel for the parties.
(3.) LEARNED counsel for the assessee submitted that the first question stands covered by a judgment of the Gujarat High Court in CIT vs. Starlight Silk Mills (P) Ltd. (2005) 199 CTR (Guj) 718 : (2006) 280 ITR 257 (Guj) taking a view that AC plants, electric installation and transformers form integral part of plant and machinery, hence, investment allowance is available on the same. No contrary view has been shown by learned counsel for the Revenue. Following the principles laid down in Starlight Silk Mills' case (supra) and keeping in view findings of fact recorded by the Tribunal to the effect that the above items are part and parcel of plant and machinery, we answer the first question in favour of the assessee and against the Revenue. As regards the second question, the matter has only been remitted back by the Tribunal to the ITO for calculating the extra shift allowance on the entire machinery. Learned counsel for the assessee fairly states that the question referred to above is covered by the judgments of Hon'ble Supreme Court of India in South India Viscose Ltd. vs. CIT (1997) 141 CTR (SC) 374 : (1997) 227 ITR 286 (SC) and Sundaram Spinning Mills vs. CIT (1997) 141 CTR (SC) 360 : (1997) 227 ITR 301 (SC). The counsel for the Revenue could not dispute this proposition.;