Law:

Section:

Section 32A of the Income-tax Act, 1961 - Investment allowance - Assessment year 1982-83 - Assessee was engaged in construction work - It claimed benefit of investment allowance on plant and machinery employed in construction work - Tribunal without going into factual matter but simply relying on an earlier decided case, allowed benefit - Against said order instant reference was filed - Whether, Tribunal was required to consider material available on record before allowing benefit of investment allowance to assessee - Held, yes - Whether, therefore, matter was to be remitted to Tribunal to consider it afresh - Held, yes CASES REFERRED TO CIT v. N.C. Budharaja & Co. [1990] 121 ITR 212 (Ori.) [Para 1], CIT v. Bhageeratha Engg. Ltd. [1992] 193 ITR 674/ 61 Taxman 248 (Ker.) [Para 2], CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412/ 70 Taxman 312 (SC) [Para 3] and CIT v. Coromandel Engg. Co. Ltd. [2002] 257 ITR 792/ 123 Taxman 828 (Mad.) [Para 4]. J. Naresh Kumar for the Applicant. V. Ramachandran, Anitha Sumanth and Mallika S. for the Respondent. JUDGMENT N.V. Balasubramanian, J. - These are references on the basis of the directions of this court under section 256(2) of the Income-tax Act, 1961 (herein referred to as "the Act"), and the question of law referred to us reads as under : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is entitled to deduction under section 32A on the plant and machinery used in construction work?" Though there are three tax case references, the assessment year involved is common, viz., 1982-83. The Assessing Officer completed the original assessment of the assessee for the assessment year 1982-83 and allowed the investment allowance claimed by the assessee under section 32A of the Income-tax Act, 1961, on the plant and machinery employed in construction work. The Commissioner of Income-tax, Tamil Nadu, Chennai-34, exercised the revision power under section 263 of the Act and held that the assessee was engaged in the construction activities and hence he was not entitled to the investment allowance. Accordingly, he directed the Assessing Officer to…

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