COMMISSIONER OF INCOME TAX Vs. KOTHIWALA COLD STORAGE

JUDGEMENT

(1.) At the instance of the Revenue, the following question has been referred for our opinion :

(2.) The facts giving rise to this reference are these. The assessee-firm is running a cold storage. Its accounting year for the assessment year 1982-83 ended on October 9, 1981. In the relevant previous year, the assessee had debited a sum of Rs. 5,058 in the profit and loss account which he claimed as investment allowance under Section 32A(2)(b)(ii) of the Income-tax Act. The same was disallowed by the Inspecting Assistant Commissioner (Assessment). On appeal, the Commissioner of Income-tax (Appeals), relying on a decision of the Madhya Pradesh High Court in [1986] 159 ITR 18 (MP) in the case of Mittal Ice and Cold Storage, held that the cold storage could not be said to be engaged in manufacturing or producing any article or thing and, therefore, the assessee was not entitled to claim any deduction by way of investment allowance on account of the purchase of machinery for its cold storage plants.

(3.) On further appeal to the Income tax Appellate Tribunal, the investment allowance claimed by the assessee was allowed and the Assessing Officer was directed to allow investment allowance on the new machinery purchased by the assessee in accordance with law. In support, the Tribunal placed reliance on the decision of the Punjab and Haryana High Court in [1989] 178 ITR 585 (CIT v. S. Warriam Singh Cold Stores).