Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2015 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 572 - GUJARAT HIGH COURTInvestment allowance under section 32A in respect of plant and machinery installed from April 1, 1987, to March 31, 1988, in the assessment year 1989-90 - Tribunal allowed claim - Held that:- Reintroduction of the scheme of investment allowance under section 32A of the Act the intention of the Legislature was to grant the benefit thereunder in respect of plant and machinery installed after 1988 as also to plant and machinery installed during the period April 1, 1987, to March 31, 1988. However, with a view to take care of a situation whereby the cost of such machinery had been met with out of the amount released to the assessee from the Development Bank, an Explanation came to be introduced below sub-section (1) of the section which provides that for the purposes of investment allowance, "actual cost" shall mean the actual cost of the ship, aircraft, machinery or plant to the assessee as reduced by that part of such cost which has been met out of the amount released to the assessee from the Development Bank in accordance with the provisions of section 32AB(6) of the Act. Thus, to the extent of the benefit derived under section 32AB of the Act such amount stands reduced from the actual cost of the plant and machinery, and as such, the question of double deduction would not arise. As is apparent on a plain reading of sub-section (8B) of section 32A of the Act the provisions of that section have been made applicable to any new machinery or plant installed after March 31, 1987, but before April 1, 1988, if the assessee furnishes evidence to the satisfaction of the Assessing Officer that he had, before June 12, 1986, entered into a contract for the purchase of such plant or machinery with the manufacturer or owner of, or a dealer in, such machinery or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant. Thus, the intention of the Legislature clearly was to give the benefit of investment allowance in respect of plant or machinery installed during the period March 31, 1987, to April 1, 1988. If the contention of the appellant- Revenue were to be accepted, the provisions of sub-section (8B) of section 32A would be rendered nugatory and the very purpose of introducing the sub-section would be frustrated. Moreover, having regard to the fact that an assessee cannot claim the benefit of both investment allowance and investment deposit account in the same assessment year, the question of double deduction would not arise. Thus, sub-section (8B) of section 32A of the Act clearly envisages allowance of investment allowance under section 32AB of the Act in respect of plant and machinery installed from April 1, 1987, to March 31, 1988, in the assessment year 1989-90 and, hence, no infirmity can be found in the order of the Tribunal in allowing investment allowance under section 32A of the Act in respect of plant and machinery installed from April 1, 1987, to March 31, 1988. - Decided in favour of the assessee.
|