Law: Income Tax Act, 1961

Section: 32A

Income-tax----Investment allowance---Industrial undertaking---Industrial company--­Construction work ---Assessee engaged in construction work---Is an industrial company ---Assessee not entitled to investment allowance---Indian Income Tax Act; 1961, S.32A(2). Investment allowance is permissible only in the case of "industrial undertakings" and not in the case of "industrial company" or an assessee engaged in construction work: Held, accordingly, that the assessee engaged in construction work was not an industrial undertaking as it did not manufacture an article or thing as specified in subsection (2) of section 32A of the Income Tax Act, 1961 Builders Associations of India v. Union of India (1994) 209 ITR 877 (SC) fol. JUDGMENT By this reference application under section 256(1) of the Income Tax Act, 1961, the Tribunal has referred the following questions set out at page 2 of the statement of case for the opinion of this Court: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in holding the view that the assessee-­company was entitled to investment allowance as it was an industrial company according to the Income Tax Act, 1961? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in upholding the order of the Commissioner Income-tax (Appeals) who directed the Assessing Officer to allow the assessee-company the benefit of investment allowance as claimed?" The assessment year involved is 1985-86. On scrutiny of the books of account, the Income-tax Officer found that the assessee had claimed investment allowance at Rs.90,048 on the assets worth Rs.3,60,192. The Income-tax Officer did not allow the investment allowance, as the assessee does not come in the category of "industrial undertaking". The Commissioner of…

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