COMMISSIONER OF INCOME-TAXNANDLAL COLD STORAGE Vs. NANDLAL COLD STORAGE AND KOTIWAL COLD STORAGECOMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) These three income-tax references are being disposed of by a common order as the question referred for the opinion of this court is identical. The question referred at the instance of the Revenue in each of the three references for our opinion is : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the new machinery employed in the cold storage of the assessee was entitled to investment allowance in terms of Section 32A(2)(b)(iii) of the Income-tax Act, 1961?"

(2.) Each of the assessees is a registered firm and runs a cold storage. In the relevant previous year, the assessee purchased new machinery for its cold storage plant and claimed investment allowance in respect thereof in terms of Clause (iii) of Section 32A(2)(b) of the Income-tax Act, 1961, which provides for deduction of investment allowance for any new machinery or plant installed after March 31, 1976, in any industrial undertaking for the purpose of business of manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule. The Income-tax Officer rejected the assessee's claim for investment allowance on the ground that there was no manufacture or production of any article or thing in the operation of the cold storage.

(3.) The assessee appealed without any success, the Appellate Assistant Commissioner affirming the view of the Income-tax Officer. On further appeal to the Income-tax Appellate Tribunal, the contention of the assessee was upheld on the strength of the decision of the Punjab and Haryana High Court in CIT v. Yamuna Cold Storage [1981] 129 ITR 728 and held that the operation of a cold storage plant tantamounts to " manufacture of an article or thing " within the meaning of Clause (iii) of Section 32A(2)(b) and, therefore, the assessee was entitled to claim investment allowance as a permissible deduction. Accordingly, the assessee's appeal was allowed and a direction was issued for modification of the assessment.