TMI Blog1992 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... ance is not admissible on account of following reasons : (a) The investment allowance is admissible to industrial undertakings only whether small scale industrial undertakings or other industrial undertakings. Assessee in the present case is not industrial undertaking. It is a civil contractor firm, who is engaged in civil construction work for others. Essentially the assessee is providing his services/resources to the J.Ks in the construction of their factory building. (b) Even for argument s sake it is admitted that the assessee is a small scale industrial undertaking falling in cl. (b)(ii) of sub-s. (2) of s. 32A, as the aggregate value of the machinery/plant does not exceed Rs. 35 lacs (the assessee s case would not fall in cl. (b)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned senior Departmental Representative argued that the assessee was in the first instance not an industrial undertaking but a civil contractor. Secondly, even if it is accepted to be an industrial undertaking, it is a small scale industrial undertaking and hence being a contractor engaged in construction work is not entitled to get the benefit of investment allowance. He submitted that in the case of small scale industrial undertaking, the benefit is available to only those assessees who are engaged in the manufacturing or production of goods and not in the construction work. He pointed out that in the case of Mohd. Miyan, contractor, a copy of Tribunal s order in whose case has been filed by the assessee in its paper book, the Jaipur Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the decisions had been given in favour of the proposition that the contractors were entitled to benefit of investment allowance : 1. CIT vs. N.C. Buddharaja Co. 2. Shankar Construction Co. vs. CIT (1991) 94 CTR (Kar) 155 : (1991) 189 ITR 463 (Kar) 3. CIT vs. Bhageeratha Engg. Ltd. (1991) 99 CTR (Ker) 204 : (1992) 193 ITR 674 (Ker) 4. CIT vs. Mahalinga Setty Co. (1992) 102 CTR (Kar) 305 : (1992) 195 ITR 526 (Kar) 5. ITO vs. Mohd. Miyan ITA No. 1234/Jp/86 6. Progressive Engg. Co. vs. ITO (1983) 3 ITD 572 (Hyd) 7. ITO vs. Hydle Construction Co. (P) Ltd. (1983) 6 ITD 575 (Del) (SB) 8. Shah Construction Co. vs. ITO (1986) 26 TTJ (Bom) 3 9. Shah Engg. Co. vs. ITO (1984) 20 TTJ (Ahe) 16 10. ITO vs. Orlican Pvt. Ltd. (1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the treatment to be given to different assessees falling under cl. (ii) or cl. (iii) of s. 32A(2)(b) of the Act. In fact, in the case of Mohd. Miyan there is nothing to show that any one of these items were argued and the learned members of the Tribunal who had taken that decision had even observed that "the point is not free from doubt inasmuch as the assessee has not actually produced any article or thing. However, two Benches of the Tribunal in T. Venkateswara Rao Co. vs. ITO (1983) Taxation 70(6)-80 and Progressive Engineering Co. vs. ITO (1983) Taxation (70) (6A)-23 (sic) has held that a firm doing business in a ballast material and execution of civil works or constructing a dam was entitled to the benefit of investment allowance. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all scale industrial undertaking which is covered under sub-cl. (ii) of s. 32A(2)(b). Similarly in the cases of CIT vs. Bhageeratha Engineering Ltd. and CIT vs. Mahalinga Setty Co. the issues involved were under sub-cl. (iii). Shri Birla himself conceded that the issue that construction companies were not engaged in manufacturing or production of articles or things has already been decided against the assessee in the cases of R.S. Avtar Singh and J.S. Construction Co. by the Delhi Benches of the Tribunal. In these circumstances the only issue which remains to be decided is whether a civil construction work contractor even if it falls in the category of a small scale industrial undertaking can be entitled to the benefit of investment allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l scale industrial undertakings were deprived of the benefit of investment allowance if they were engaged in the business of construction only and which may be available to industrial undertakings other than small scale industrial undertakings. 7. We, therefore, hold that none of the cases cited by the learned counsel for the assessee support his case and that the benefit of investment allowance cannot be given to those assessees who fall in the category of small scale undertakings under s. 32A(2)(b)(ii) and who are engaged in the business of construction only and not in the business of manufacturing or production of articles or things and that the assessee before us is not engaged in the business of manufacturing or production of article ..... X X X X Extracts X X X X X X X X Extracts X X X X
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