Law: Income Tax Act, 1961

Section: 32

Income-tax----Investment allowance---Cold storage plant---No production or manufacture of article or thing---Not eligible for investment allowance--¬Income Tax Act, 1961, S. 32-A---Indian Income Tax Rules, 1962, R.5-AA.---[CIT v. S. Warriam Singh Cold Stores (1989) 178 ITR 585 (P&H) dissented from]. Taking into consideration the functions of a cold storage plant, the goods stored in a cold storage plant run by an assessee cannot be said to be produced or manufactured by the assessee, and the assessee is, therefore, not entitled to investment allowance in respect of the plant, under section 32-A of the Income Tax Act, 1961. Delhi Cold Storage (P.) Ltd. v. CIT (1991) 199 ITR 656 (SC) rel. CIT v. Nandlal Cold Storage (1993) 199 ITR 327 (All.); Mittal Ice Cold .Storage v. CIT (1986) 159 ITR 18 (MP) and S.B. Cold Storage Industries (Pvt.) Ltd. v. CIT (1987) 166 ITR 646 (Cal.) fol. CIT v. S. Warriam Singh Cold Stores (1989) 178 ITR 585 (P&H) dissented from. JUDGMENT At the instance of the Revenue, the Income-tax Appellate Tribunal, Patna Bench, Patna, referred to this Court the following questions for its opinion under section 256(1) of the Income Tax Act, 1961: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in allowing investment allowance under section 32-A of the Act since the goods stored in the cold storage are not produced or manufactured by the assessee and in view of the insertion of Rule 5-AA from April 1, 1981? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in setting aside the orders of the lower authorities and allowing investment allowance and directing the Income-tax Officer to ask the assessee to furnish the particulars of other things?" To answer these questions it will be convenient to refer to section 32-A which provides for investment allowance in respect of ship, aircraft, machinery, plant, etc. This section, in relevant part, is as under: 32-A(2)(b)(iii). In any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the…

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