Law:

Section:

Section 32A of the Income-tax Act, 1961 - Investment allowance - Assessment year 1982-83 - Assessing Officer disallowed assessee's claim for investment allowance on air-conditioning plant, electric installations and transformer for reasons that those machineries constituted separate self-contained units and were to be seen as such and that mere fact that it helped to run other art silk machinery could not make it part of integrated machinery for manufacture of art silk - However, both Commissioner (Appeals) and Tribunal concurrently held that those items constituted an integrated plant and were not items which could be operated independent of each other for purpose of business of assessee - Even revenue did not attempt to make a case that said plant and machinery was used for any other purpose - Whether, on aforesaid facts, Tribunal rightly held that investment allowance was available in respect of air-conditioning plant, electric Installations and Transformers installed by assessee - Held, yes FACTS The assessee claimed investment allowance on the electric installation transformers and A.C. Plant. The Assessing Officer disallowed investment allowance on those items, viz, for the reasons that those machineries constituted separate self-contained units and were to be seen as such and the mere fact that it helped to run the other art silk machinery could not make it part of the integrated machinery for manufacture of art silk. On appeal, the Commissioner (Appeals) upheld the claim of the assessee. The Tribunal held that for being eligible to grant of investment allowance under section 32A it was not necessary for the assessee to establish that each item of plant and machinery should be directly used in the process of manufacturing and that once plant and machinery was used for the purpose of the assessee's business of manufacturing art silk cloth, it would become eligible for grant of investment allowance provided other conditions stood fulfilled and since the Assessing Officer had not disputed that other conditions stipulated under section 32A were fulfilled, the order of the Commissioner (Appeals) was to be confirmed. On reference : HELD As could be seen from…

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