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[2009] 308 ITR 397 (Punjab & Haryana) HIGH COURT OF PUNJAB AND HARYANA Commissioner of Income-tax v. Groz Beckert Saboo Ltd.* ADARSH KUMAR GOEL AND AJAY TEWARI, JJ. IT REFERENCE NO. 95 OF 1990 SEPTEMBER 17, 2008 Section 32A of the Income-tax Act, 1961 - Investment allowance Manufacture of needles used in textile machinery as accessories amounts to manufacture of industrial and agricultural machinery as referred to in Ninth Schedule and as such assessee manufacturing them would be entitled to investment allowance on them [Assessment year 1977-78] [In favour of assessee] CIT v. Groz Beckert Saboo Ltd. [2009] 308 ITR 397 /222 CTR (Punj. & Har.) 427 In view of the decision in CIT v. Mir Mohammed Ali[1964] 53 ITR 165 (SC) and Aruna Mills Ltd. v. CIT[1966] 59 ITR 507 (Guj), manufacture of needles used in textile machinery as accessories amounts to manufacture of industrial and agricultural machinery as referred to in the Ninth Schedule and as such the assessee manufacturing them would be entitled to investment allowance on them. CASE REVIEW Aruna Mills Ltd. v. CIT[1966] 59 ITR 507 (Guj) and CIT v. Mir Mohammed Ali[1964] 53 ITR 165 (SC)followed and relied upon. Assistant Commissioner of Commercial Taxes-cum-Entry Tax (Assessment - 1) Bangalore v. Mysore Industrial Supplies [1997] 106 STC 585 (Kar.) distinguished. Ms. Urvashi Dhugga for the Appellant. Ms. Radhika Suri for the Respondent. JUDGMENT Ajay Tewari, J. - This is a reference made by the Tribunal on the following questions of law : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the order of the Commissioner of Income-tax passed under section 263 ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing the investment allowance of Rs. 4,06,822 and interest of Rs. 18,575." 2. The assessee claimed investment allowance under section 32A(2) of the Income-tax Act, 1961 (for short "the Act") for the year 1977-78. The Assessing Officer came to the conclusion that the assessee was entitled to the said investment allowance. On March 12, 1979, the Inspecting Assistant Commissioner of…

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