COMMISSIONER OF INCOME TAX Vs. VINAY KUMAR SIGTIA

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Cuttack Bench, Cuttack, at the instance of the Revenue has under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), referred the following question of law as arising out of the orders dated April 11, 1989 and April 12, 1989, in I.T.A. Nos. 198 (CTK) of 1986 and 199 (CTK) of 1986, respectively :

(2.) THE opposite party is a small scale industrial unit as per the certificate granted by the Director of Industries, Orissa. It manufactures coal briquettes and lime as well as engaged in computer business. For the assessment years 1981-82 and 1982-83 investment allowance claimed by the opposite party under Section 32A of the Act on data processing machine was allowed by the Income-tax Officer in the assessment order dated January 17, 1984, and January 23, 1984, respectively. THE Commissioner of Income-tax by invoking the power vested in him under Section 263 of the Act, examined the opposite party's record and held that investment allowance was not admissible on data processing machine as it did not manufacture any article or thing. He was of the view that the assessments for the years 1981-82 and 1982-83 were erroneous and prejudicial to the Revenue. He accordingly set aside both the assessments and directed the Income-tax Officer to make fresh assessments in accordance with law subject to the observations made by him in the order. Aggrieved by the orders of the Commissioner, the opposite party filed appeals before the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"). THE appeal filed for the assessment year 1981-82 was allowed in part by order dated April 11, 1989. THE Tribunal in paragraph 3 of the order held as follows :

(3.) IT has also been held by the Supreme Court in CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308 that an exemption provision in a taxing statute (like sections 32A) is a beneficial one and full effect has to be given to the language used in the said section.