COMMISSIONER OF INCOME TAX Vs. HARBHAJAN SARBJIT ASSOCIATES

JUDGEMENT

(1.) The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for opinion to this court "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the tractors/trollies were not road transport vehicles and were, therefore, entitled to investment allowance under Section 32A of the Income-tax Act, 1961 ?"

(2.) Briefly stated, the facts giving rise to the present reference are as follows :

(3.) The respondent-assessee is a firm and is engaged in the work relating to construction of tunnel and minor irrigation projects. The work involved earth moving, rock cutting of tunnels, filling work and structural work relating to the construction of a thermal power station. For the assessment year 1980-81, the Inspecting Assistant Commissioner (Assessment) rejected the claim of the respondent for deduction of investment allowance under Section 32A of the Act on tractors and trollies used in the assessee's construction works on the ground that the tractor represented road transport work vehicle. The Commissioner of Income-tax (Appeals) had held that under the Motor Vehicles Act, 1939, the tractor may be a motor vehicle, it was not to be used for carrying on passenger or goods. The Revenue's appeal has been dismissed by the Tribunal.