Law: Income Tax Act, 1961

Section: 32

Income-tax----Investment allowance---Conditions for grant---Manufacture or production of article or thing---Not necessarily for sale in market---X-Ray machines--¬X-ray photograph obtained is article or thing---Machine must be used in business as distinct from profession ---Assessee, a doctor---Whether carrying on business or practising profession---To be decided on facts---No rule that professional cannot carry on business---Matter remanded---Indian Income Tax Act, 1961, S.32-A. Photographs of various parts of the human body obtained by an X-ray machine are the end result of effort and activity carried on with the machine by human endeavour, which is helpful for the proper and efficient diagnosis of the patient. The photographs or graphs obtained cannot but be a thing produced by the use of X-ray machine. It is not the requirement of section 32-A of the Income Tax Act, 1961, nor can it be read in the context of the provision, that in order to fulfil the condition that a machinery or plant must have been installed in an industrial undertaking for the purpose of manufacture or production of an article or thing. That such article or thing must be saleable in the open market as a common marketable commodity only. A thing may be produced for being sold to a particular person or for the use of a particular person. Therefore an X-Ray machine satisfies the condition in section 32-A that it is plant and machinery through which an article or thing could be produced. CIT v. Trinity Hospital (1997) 225 ITR 178 (Raj.) fol. Merely because a person happens to be a professionally, qualified doctor, it cannot be said that such persons activity cannot be treated as an activity of carrying Qn business. A professional activity can also be characterised as an activity of carrying on business if it is carried on like a commercial activity. Though the wide definition of "industry" in the context of employer-employee relations under the various industrial laws may not be applicable to the meaning of "industrial undertaking" under the Income Tax Act, as the expression is used in the context in which the provisions are set, the meaning of "industrial undertaking" in the set up of the…

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