COMMISSIONER OF INCOME TAX Vs. DALJEET TYRES

JUDGEMENT

(1.) This appeal under Section 260A of the IT Act has been filed by the Revenue on the following question of law : Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in upholding the findings of CIT(A) directing allowance of the assessee's claim for investment allowance under Section 32A of the IT Act, 1961 at, Rs. 3,79,285 on new machineries installed in the branch set for doing printing job on tin plates.

(2.) The assessment year in question is 1989-90. The assessee-respondent feeling aggrieved by an order of assessment dt. 15th March, 1990, by means of which plea of the assessee that he was entitled to the investment allowance to the tune of Rs. 3,79,285.40, was rejected by the AO under Section 143(3) of the Act, filed an appeal and the CIT(A) vide his order dt. 30th April, 1992 allowed the said claim upsetting the findings recorded by the AO and the appeal preferred by the Revenue before the Tribunal against the order of the CIT(A) has been dismissed on 20th May, 1999. Feeling aggrieved by the aforesaid orders, the present appeal has been filed by the Revenue.

(3.) The facts relevant for the present controversy are that the assessee had maintained two sets of account under the relevant assessment years, wherein he carried on two businesses, namely, one that of tyres and the other of running an industry of printing on tin plates. The assessee had maintained two sets of account; one head office set styled M/s Daljeet Tyres and the other branch set styled M/s Satguru Metal Printers. The assessee claimed that his tin printing unit was an industry involved in manufacturing process and therefore, was entitled to the benefit of investment allowance, which he claimed at Rs. 3,79,285.40 in the return for which adequate reserve of Rs. 2,85,000 had also been credited in the books of account. The investment allowance was claimed under Section 32A of the Act. The AO, by the following reasoning, rejected the claim of the assessee : The assessee in branch set does the work of printing on tin plates. The new machineries installed in the branch set for doing printing job on the tin plates do not qualify the condition laid down in Section 32A(2) of IT Act, 1961 for grant of investment allowance as it nowhere refers to this printing of an article and the activities of the same are not for the purposes of business of generation or distribution of electricity or any other form of power and manufacture or production of any article or thing. The claim of deduction of investment allowance is rejected.