TMI Blog1993 (3) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ras Bench of the Appellate Tribunal in the case of First Leasing Co. of India Ltd. v. ITO [1983] 3 ITD 808 (Mad.), deleted the addition and allowed investment allowance. 14. The learned Departmental Representative taken us through the Madras Bench decision in the case of First Leasing Co. of India Ltd. where the view has been taken that the investment allowance is allowable to the assessee who does not himself engage in the manufacture or production of article or things but leased it out on rent to those who utilise it for the said specified purpose. However, it was submitted that the observation in the case of Mahabir Cold Storage v. CIT [1991] 188 ITR 91 (SC) was not considered. Our attention was invited to the observations where the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed. 15. The learned counsel for the assessee in reply placed reliance on the decision of Karnataka High Court in the case of CIT v. Shaan Finance (P.) Ltd. [1993] 109 CTR 209 and it was submitted that the distinction has been drawn between the provision of section 32A and that of section 33 and after considering this, the Hon'ble Karnataka High Court has held that investment allowance is allowable where the machinery is leased to other party if the business of the assessee-company is leasing the machinery on hire-purchase. 16. We have considered the rival submissions and have gone through the observation of the Hon'ble Supreme Court in the case of Mahabir Cold Storage the Hon'ble Supreme Court made this observation in connection with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for grant of development rebate whereas the case before us related to a claim of investment allowance. The learned Departmental Representative invited our attention to the Circular No. 202 ofJuly 5, 1976also where it is mentioned that provisions of sections 32A and 33 are in pari materia. But we find that this is not so because in the sub-clauses of section 33, there is a specific reference to the assessee's business premises where the machinery is to be installed which is not in section 32A. Secondly, the Circular is for the guidance of the departmental officers only. Regarding the observations of the Hon'ble Supreme Court, we would like to mention here that to our understanding the Apex Court has cited an example for instance of a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject-matter is to be owned by the assessee ; (2) The subject-matter is wholly used for the purposes of the business of the assessee : and (3) Subject-matter should come under any of the enumerated categories, as per section 32A(2). Machinery in the instant case is used in the business of the assessee because, business of the assessee is leasing out the machineries. Therefore, the further condition to be satisfied, is the condition stated in sub-section (2) of section 32A. Here, the relevant clause relied upon by the assessee is clause (b)(iii) of section 32A(2). The lessee i.e. the person who took the machinery on hire-purchase has installed it for his business of manufacturing any article or thing. Section 32A is a beneficial provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able as to the Legislature's intention by comparing section 32A(2B) with section 33(1)(b)(B)(ii) and (iii). In the latter two sub-clauses (of section 33) there is a specific reference to the assessee's business premises where the machinery is to be installed. Similarly, the language of sub-clause (a) of section 32A(2) stands in clear contrast to the language used in its sub-clause (b). Each machinery installed in a particular manner is the cause for the investment allowance to be granted to the person who owns the machinery, provided, the owner uses it in its entirety in his business. The benefit is given with reference to the actual user of the machinery, though the benefit is given with reference to the actual user of the machinery, explo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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