TMI Blog1992 (11) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... wance and he ought to have considered that the assessee is not entitled to investment allowance on mining machinery as it is not engaged in any manufacturing activity. Reliance was placed on the judgment of the Supreme Court in the case of Idandas v. Anant Ramchandra Phadke AIR 1982 SC 127. 2. The assessee is a H.U.F. While computing the total income for the assessment year 1982-83 for which the accounting year ended on 31-3-1982, the Assessing Officer disallowed investment allowance of Rs. 1,54,665 claimed in respect of two Cummins Engines fitted to barge at the cost of Rs. 3,56,289 and the screening plant at the cost of Rs. 2,62,370 on the ground that the conditions laid down under section 32A(2)(a) or 2(b)(ii) and (iii) are not fulfill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in clause (2)(a) of section 32A. We have arrived at this conclusion on the basis of the functional test laid down in clause (b) of sub-section (2) of section 32A for the new machinery. Firstly, new machinery are such that they are to be in a position capable of being installed which pre-supposes that they should be independent machinery or plant and not part of any plant or machinery. From the point of view of ship the criterion laid down is it should be a new ship or new aircraft acquired after 31-3-1976 by an assessee engaged in the business of operation of ships or aircrafts and this requirement is not satisfied in respect of the new engines fitted on an old barge. Further sub-clause (ii) requires that the new machinery or plant sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tests are not capable of being satisfied by the two engines. 7. Coming to the investment allowance on screening plant, we agree with the conclusion of the CIT(A) because the screening plant plays a vital role in mechanically separating the iron ore from other impurities, rock etc. so as to obtain sellable iron ore. In the case of Aditya Minerals (P.) Ltd. v. ITO [1988] 26 ITD 221, the Tribunal, A Bench, Hyderabad considered the question of investment allowance on machineries used in mining operations for production of manganese ore. After drilling about three to five feet, the rocks found were blasted and the rocks and material containing manganese ore were brought to the surface which were crushed by machines to sizes. These crushed mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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