TMI Blog1997 (2) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst it but this issue should be decided on merit. 2.2 The learned Departmental Representative relied on the decision of Delhi High Court in the case of Union of India vs. Sanghi Motors (1991) 91 CTR (Del) 15 : (1992) 187 ITR 703 (PC)) and in the case of Escorts Ltd. vs. Union of India (1991) 93 CTR (Del) 169 : (1990) 189 ITR 81 (Del). 2.3 We have considered the rival submissions and have gone through the material available on record. We find that the Hon'ble Delhi High Court has taken a view against the assessee. Therefore, in view of the decision of Hon'ble Delhi High Court, cited above, we do not find any justification to interfere. This ground is hereby rejected. 3. The last and the main ground of assessee relates to claim of investment allowance on exchange rate fluctuation capitalised during the year. The assessing officer rejected the claim of assessee observing as under: (a) The assessee was required to explain as to why investment allowance on this amount be allowed particularly in view of the provision of s. 43A(ii) which reads as under: The provisions of sub-s. (i) shall not be taken into account in computing the actual cost of an asset for purpose of the ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. In fact the Board in its various circulars issued from time to time have directed that its instructions with regard to the issues like creation of reserve etc., with reference to development rebate allowance may be followed while considering the grant of investment allowance also. The investment allowance which was introduced w.e.f.1st April, 1976has taken the place of development rebate in respect of machinery or plant installed etc., after31st March, 1976, save in exceptional circumstances in which development rebate is still allowable in respect of such assets. It was fairly conceded by the learned counsel of the appellant during the course of hearing before me that it will be practically impossible to give any such allowance as is claimed because the rates can keep fluctuating from time to time and the liability of the company would only be known after the expiry of the period in which the loan amounts would be repaid. In view of the aforementioned facts and circumstances, and also the reasons given by the AO, with which I am in full agreement, the action of the AO is upheld." and thereby rejected the claim of the assessee. The assessee is aggrieved. 3.1 The learned as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 96) 222 ITR 472 (Bom). 3.3 The learned assessee's counsel submitted that the decision of the Tribunal in the case of Dalmia Cement (Bharat) Ltd. is not applicable to the facts of the present case because in that case the claim of investment allowance was made in respect of cost of plant machinery fixed in earlier years. But due to change of fluctuation in the year which is subsequent to those years, the allowance was denied in view of provisions of s. 43A. But the facts of the present case is distinguishable because in this year, the machinery was put to use and this is the year of profit. The exchange fluctuation has also taken place in this year only. Therefore, the decision of the Tribunal is distinguishable on facts. It is pointed out that in the case of Bombay High Court the claim related to additional cost and not to actual cost. Reliance was placed on the decision of Karnataka High Court in the case of CIT vs. Shaan Finance (P) Ltd. (1992) 109 CTR (Kar) 209 : (1993) 199 ITR 409 (Kar) for the proposition that the language of two ss. 33 and 32A are not in pari materia, hence in respect of machinery owned by the assessee its claim cannot be denied under s. 32A. Reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent (P) Ltd. we have held that the provisions of ss. 32A and 33 are not in pari materia. This view was taken taking into consideration the observation of the Hon'ble Karnataka High Court in the case of Shaan Finance (P) Ltd. The Hon'ble Karnataka High Court has drawn a distinction as under: In the later two sub-clauses (of s. 33) there is a specific reference to the assessee's business premises where the machinery is to be installed. Similarly, the language of sub-cl. (a) of s. 32A(2) stands in clear contrast to the language used in its sub-cl. (b). Each machinery installed in a particular manner is the case for the investment allowance, to be granted to the person who owns the machinery, provided, the owner used it in its entirety in his business." Therefore, in our view, the provisions of s. 32A(2) and s. 33 are not in pari materia in the terms mentioned above. The Tribunal Bench of Madras in the case of Southern Asbestos Cement Ltd. vs. Dy. CIT has taken a view that where the company installed a plant and machinery during the previous year relevant to assessment year under consideration though it was purchased on deferred payment basis investment allowance is allowable on incr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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