- (1.) THE Tribunal, Jaipur Bench, Jaipur has made reference under S. 256(1) of the IT Act to this Court seeking opinion on the following question of law : "Whether, on the facts and in the circumstances of the case, the Tribunal is legally justified in holding that the hotel business is an industrial undertaking and, therefore, the assessee is entitled to investment allowance under S. 32A of the IT Act, 1961 ?"
(2.) THE respondent-assessee claimed investment allowance under S. 32A, which was not allowed by the assessing authority on the ground that the hotel business was not entitled to investment allowance as it was not a industrial undertaking. The CIT confirmed the views of the AO. The Tribunal allowed the deduction allowance following the earlier decisions given in the assessee's own case. The Hon'ble apex Court in Indian Hotels Co. Ltd. vs. ITO & Ors. (2000) 162 CTR (SC) 310 : (2000) 245 ITR 538 (SC) has held that in order to claim investment allowance under S. 32A, the requirement is that the assessee-company must be engaged in the business of manufacture or production of any article or thing. The Court further held that in case of preparing food packets for selling the same or preparing the foodstuff for serving the hotel, there is no question of manufacture or production. Thus, the question referred stands answered by the decision of the Hon'ble apex Court in Indian Hotels case (supra). Accordingly, this reference is answered in favour of the Revenue and against the assessee.;