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Section 32A of the Income-tax Act, 1961 - Investment allowance - Assessment year 1989-90 - Whether assessee-firm running a hospital is entitled to investment allowance on E.C.G. Machine, X-ray unit and other laboratory equipments installed in hospital - Held, yes CASES REFERRED TO CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412/ 70 Taxman 312 (SC) [Para 1], ITO v. Dr. S. Surender Reddy [1989] 30 ITD 296(Hyd.) [Para 1], First ITO v. Dr. P. Vithal Bhat [1983] 6 ITD 560 (Bang.) [Para 1], CIT v. Prasad Film Laboratories (P.) Ltd. [1997]225 ITR 348/[1998] 100 Taxman 99 (AP), [Para 2], CIT v. Dr. M.L. Agarwalla [2002] 258 ITR 102 (Gauhati) [Para 2], CIT v. A. Yunus Kunju [1991] 189 ITR 672 (Ker.) [Para 4], CIT v. Air Survey Co. of India (P.) Ltd. [1998] 232 ITR 707 (Cal.) [Para 4], CIT v.Trinity Hospital [1997] 225 ITR 178/[1996] 87 Taxman 127 (Raj.) [Para 4] and CIT v. Upasana Hospital [1997] 225 ITR 845/[1996]89 Taxman 525 (Ker.) [Para 4]. C. Kochunny Nair and Dale P. Kurian for the Applicant. P.K.R. Menon and George K. George for the Respondent. JUDGMENT K.S. Radhakrishnan, J. - The following questions of law stand referred to this Court under section 256(1) of the Income-tax Act for our opinion : "1. Whether, on the facts and circumstances of the case the Tribunal was justified in denying the investment allowance on E.C.G. Machine, X-ray Unit and other laboratory equipments ? 2. Whether the Tribunal was justified in holding that since the above referred equipments are not independent industrial undertaking but only part of the composite undertaking and therefore the benefit of investment allowance is not available ?" Before answering the above questions, we may refer to the basic facts. The assessee is a partnership firm running a hospital at Kozhencherry. In the income-tax assessment for the year 1989-90 assessee claimed investment allowance of Rs. 3,38,375 on the cost of assets like fire extinguishers, lifts, surgical instruments, laboratory equipments, water heaters, x-ray machines, generator etc. The Assessing Officer did not allow the claim on the ground that the machinery or plant had not been used for the manufacture or production of any article or…

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