CIT Vs. GUJARAT STATE FERTILIZERS CO. LTD.

JUDGEMENT

(1.) HAVING gone through the judgment of my learned Brother Justice M.S. Shah, in view of the reasons which follow hereinafter we record our opinion.

(2.) THE assessee is a Public Limited Company. The Company manufactures Fertilizers and Caprolactum. The assessment years are : 1977 -78, 1978 -79 and 1979 -80, the respective accounting periods being calendar years 1976, 1977 and 1978.

(3.) THE assessee preferred an alternative claim that the aforesaid expenditure went to increase the actual cost of the plant and machinery and hence the assessee should be granted investment allowance under section 32A of the Income Tax Act, 1961 (hereniafter referred to as the Act). The Income Tax Officer rejected the claim of the assessee stating that conditions for applicability of section 32A were not satisfied. The Commissioner (Appeals), before whom the assessee went in appeal held that the order of the Income Tax Officer was correct because the years under consideration are not the years when the assets were either installed or first put to use, and this was the basic requirement for applicability of section 32A of the Act. The Income Tax Appellate Tribunal, in the Second Appeal preferred before it upheld the claim of the assessee on the basis of the reasons stated in earlier orders wherein development rebate had been granted to the assessee in the same set of facts and circumstances.