COMMISSIONER OF INCOME TAX Vs. M L AGARWALLA

JUDGEMENT

(1.) THIS is an application under Section 256(2) of the Income -tax Act, 1961, with a prayer that a show -cause notice be issued to the respondents, as to why the question of law formulated or arising out of order dated March 27, 1997, passed by the Income -tax Appellate Tribunal, Guwahati Bench, Guwahati, in ITA No. 175 (Gau) of 1993, be not submitted to this court for opinion, after hearing the parties.

(2.) THE brief facts of the case are that the respondent -assessee filed the return of income for the assessment year 1989 -90 and claimed deduction of investment allowance under Section 32A of the Income -tax Act in respect of ultrasound medical diagnostic electronic equipment, servo -voltage stabiliser and air -conditioner. The Assessing Officer by order dated March 30, 1992, disallowed the claim of investment allowance holding that the ultrasound diagnostic medical equipment is utilised for observing and studying the internal organs of the human body. It only displays internal human organs on the screen, but no new article is manufactured or produced which may have a distinctive name, character and use. Aggrieved by the order passed by the Assessing Officer, the respondent preferred an appeal which was allowed by the Deputy Commissioner of Income -tax (Appeals), Guwahati Bench, Guwahati, vide order dated September 23, 1993. Relying upon certain decisions on the point, the appellate authority accepted the contentions of the assessee -respondent holding that the ultrasound machine is an electronic unit consisting of various apparatus which includes a computer, a display screen and ultra -sound generating equipment which has to be installed in a dust proof air -conditioned room. The appellate authority also made the following observations :

(3.) THE application under Section 256(1) of the Income -tax Act moved by the Revenue was rejected by order dated August 27, 1997. While doing so, the Tribunal also observed that the decision of the Rajasthan High Court in the case of Trinity Hospital , was considered and no decision taking a contrary view was shown. The present application, as indicated earlier, has been moved under Section 256(2) of the Income -tax Act.