Law:

Section:

Section 32A, read with Explanation to section 32(1)(vi), of the Income-tax Act, 1961 - Investment allowance - Whether Government of India is a 'person resident in India' and ships acquired from it will fall within mischief of Explanation (1) to section 32(1)(vi), thereby disentitling assessee-corporation which had purchased ships from Government of India to investment allowance - Held, no Section 80J(5)(ii) of the Income-tax Act, 1961 - Deduction - Profits and gains from newly established industrial undertaking, etc. - Whether Government of India is a 'person resident in India' within meaning of that expression in section 80J(5)(ii) - Held, no Facts The assessee-corporation acquired certain crafts separately during the assessment year 1977-78 and claimed investment allowance under section 32A and deduction under section 80J on the value of the crafts. The ITO rejected the claim firstly on the ground that the crafts acquired could not be regarded as ships for the purpose of sections 32A and 80J and secondly because the crafts were already used by the Government of India. The Tribunal held that the assessee-corporation was entitled to the aforesaid reliefs on all the crafts. On reference, the revenue contended that the Government of India was a 'person resident in India' and, therefore, in terms of Explanation to section 32(1)(vi), the crafts owned and used by it were not new ships and did not qualify for the investment allowance and the deduction under section 80J. Held If the State or the Government cannot be regarded as a 'person' for purpose of section 2(31) and, consequently, is immune from taxation whether on grounds of sovereignty or otherwise, it is natural to extend the same logic to understand the expression 'person' wherever it occurs in the Act. There is nothing in the context to compel giving a different meaning to that expression when it came to charging section 4 and give an entirely different meaning to that expression occurring elsewhere at different places in the Act. Wherever the expression 'person' occurs, unless it is shown that the context otherwise requires, the State or the Government is excluded by the meaning of the expression 'person'.…

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