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JUDGMENT L. Narasimha Reddy, J. - This appeal is preferred under section 260A of the Income-tax Act, 1961 (for short "the Act") by the assessee-appellant assailing the order, dated May 4, 2000, passed by the Hyderabad Bench A of the Income-tax Appellate Tribunal in I. T. A. No. 21/Hyd/1996. 2. The brief facts, that gave rise to the filing of this appeal, are as under : The appellant is a company, involved in the activity of construction, particularly of dams. During the assessment year 1983-84, it claimed the investment allowance under section 32A of the Act. The Income-tax Officer (ITO), the respondent herein, found the claim to be tenable and permitted the investment allowance to be absorbed to the extent possible in that assessment year. Since a substantial portion thereof remained unabsorbed, it was carried forward and was partially absorbed for the assessment years 1983-84 to 1986-87. Still some portion thereof remained. It is stated that the appellant sustained losses during the assessment years 1986-87 to 1991-92. Hence, there was no occasion to absorb the balance of the investment allowance. It was only in the assessment year 1991-92 that the claim was made to permit it to set off the unabsorbed portion of the investment allowance. Through an order, dated May 3, 1993, the Income-tax Officer allowed such set off to the extent of Rs. 8,62,585. 3. However, proceedings were initiated under section 154 of the Act and a notice was issued to the appellant at a later stage by the Income-tax Officer. It was mentioned that in view of the judgment of the Supreme Court in CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412/70 Taxman 312 the investment allowance ought not to have been allowed. Stating that no reply was received to the show-cause notice, the Income-tax Officer passed an order dated January 24, 1994, disallowing the investment allowance, that was set off in the previous assessment year. 4. The appellant filed an appeal before the Commissioner of Income-tax (Appeals). The appeal was allowed through order dated October 4, 1995. Challenging the same, the Department filed I.T.A. No. 21/Hyd/1996. The Tribunal allowed the appeal and had set aside the order…

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