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2015 (5) TMI 218 - HC - Income TaxInvestment allowance under Section 32A disallowed - Held that:- The contract dated 18.08.1986 was not a new contract but only a continuation or in other words modification of the existing contract dated 02.05.1986 as there was a price escalation and improvement of product. Even the insurance which was covered by shipper was also taken on 09.06.1986 which was prior to 12.06.1986. The finding of fact recorded by the CIT(A) is in consonance with section 32A(8B) of the Act. The Tribunal has erred in taking a contrary view and has misinterpreted section 32A(8B) of the Act and the facts are not properly appreciated. However, the assesee shall be entitled only to deduction on the amount which was referred in the contract dated 02.05.1986 which on pro-rata basis comes to ₹ 47,25,633/- and 20% of the same comes to ₹ 9,45,126/-. We therefore answer the question raised in the present appeal in the affirmative to that extent. The assessee shall be entitled to deduction on investment allowance to the extent of ₹ 9,45,126/- - Decided partly in favour of assessee.
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