TMI Blog2015 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ature of the transaction and the effect in the assessment year are also the aspects, which may be required to be considered. The Tribunal being the final fact finding authority needs to reexamine the matter as per the observations made by us herein above and it may not be possible for this Court to consider the aspect of finding of fact in the present appeal for which the scope of judicial scrutiny is limited to substantial question of law. In view of the aforesaid, we find that when the AO had the authority or power to examine, but nature of transaction, effect on the profit of the assessment year and the other incidental aspects, which may touch to the finding of fact, are not examined by the Tribunal, it would be just and proper to remand the matter to the Tribunal for the limited aspect of admissibility of the amount of ₹ 1,96,117/- for the purpose of calculating the investment allowance available under section 32AB of the Act. - Decided in favour of revenue for statistical purposes. - Tax Appeal No. 419 of 2000 - - - Dated:- 5-1-2015 - Jayant Patel And S. H. Vora,JJ. For the Appellant : Mr Nitin K Mehta, Adv. For the Respondent : Mr S N Soparkar, Adv. J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the investment deposit account and the same reads as under: 32AB. Investment deposit account.- (1) Subject to the other provisions of this section, where an assessee, whose total income includes income chargeable to tax under the head Profits and gains of business or profession , has, out of such income,- (a) deposited any amount in an account (hereafter in this section referred to as deposit account) maintained by him with the Development Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, which-ever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a), in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme) to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea in India, to be approved in this behalf by the Tea Board, the assessee shall be allowed a deduction (such deduction being allowed before the loss, if any, brought f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of depreciation; (ii) the amount of income-tax paid or payable, and provision therefor; (iii) the amount of surtax paid or payable under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (iv) the amounts carried to any reserves, by whatever name called; (v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; (vi) the amount by way of provision for losses of subsidiary companies; and (vii) the amount or amounts of dividends paid or proposed, if any debited to the profit and loss account; and as reduced by any amount or amounts withdrawn from reserves or provisions, if such amounts are credited to the profit and loss account . (4) No deduction under sub-section (1) shall be allowed in respect of any amount utilised for the purchase of- (a) any machinery or plant to be installed in any office premises or residential accommodation, including any accommodation in the nature of a guest-house; (b) any office appliances (not being computers); (c) any road transport vehicles; (d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and gains of business or profession of that previous year and shall accordingly be chargeable to income-tax as the income of that previous year, as if the business had not closed or, as the case may be, the firm had not been dissolved. (5B) Where any amount standing to the credit of the assessee in the deposit account is utilised by the assessee for the purposes of any expenditure in connection with the business or profession in accordance with the scheme, such expenditure shall not be allowed in computing the income chargeable under the head Profits and gains of business or profession . (6) Where any amount, standing to the credit of the assessee in the deposit account, released during any previous year by the Development Bank for being utilised by the assessee for the purposes specified in the scheme or at the closure of the account 75 [[in circumstances other than the circumstances specified in clauses (b), (c) and (e) of sub-section (5A), is not utilised in accordance with , and within the time specified in,] the scheme, either wholly or in part, the whole of such amount or, as the case may be, part thereof which is not so utilised shall be deemed to be the profits and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a deduction has been allowed to an assessee under this section in any assessment year, no deduction shall be allowed to the assessee under sub-section (1) of section 32A in the said assessment year (hereinafter referred to as the initial assessment year) and a block of further period of four years beginning with the assessment year immediately succeeding the initial assessment year. Explanation.-In this section,- (a) computers does not include calculating machines and calculating devices; (b) Development Bank means- (i) in the case of an assessee carrying on business of growing and manufacturing tea in India, the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (61 of 1981); (ii) in the case of other assessees, the Industrial Development Bank of India established under the Industrial Development Bank of India Act, 1964 (18 of 1964) and includes such bank or institution as may be specified in the scheme in this behalf. 6. The relevant part of section 32AB for considering the question of law formulated in the present matter is sub section (1), sub section (3) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the assessment year cannot be looked into by the AO. To put it otherwise, if any transaction or any entry in the Books of Account is pertaining to the period prior to the assessment year and the profit is earned in the previous year, though otherwise shown in the Books of Account by way of adjustment entry or otherwise in the assessment year, such cannot be at all inquired by the AO. At this stage, we may refer to certain provisions of the Act. Section 4 of the Act for the charge of income tax reads as under: 4. Charge of income- tax (1) Where any Central Act enacts that incometax shall be charged for any assessment year at any rate or rates, income- tax at that rate or those rates shall be charged for that year in accordance with, and [subject to the provisions (including provisions for the levy of additional income- tax) of, this Act] in respect of the total income of the previous year of every person: Provided that where by virtue of any provision of this Act income- tax is to be charged in respect of the income of a period other than the previous year, income- tax shall be charged accordingly. (2) In respect of income chargeable under subsection (1), income- t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, the same can be examined by the AO for the purpose of arriving at the figure of the actual allowance available under section 32AB of the Act since in our view, the said aspects would touch to the root of the matter. 11. Examination of the facts of the present case further shows that so far as the AO is concerned, he did consider the said aspect and disallowed the amount for the purpose of computation under section 32AB for an amount of ₹ 1,96,117/-. The CIT (Appeals) except observing that the AO was not justified in ignoring the actual accounting procedure and denying the deduction of ₹ 1,96,117/-, has not further examined the matter in context to the span and ambit of the period of the assessment year. In the decision of the Tribunal also, there is no consideration except the reproduction of the observations of the CIT (Appeals). The Tribunal has only recorded that the finding recorded by the first appellate authority calls for no interference, but why and in what basis is not considered by the Tribunal. 12. In any case, in view of the observations made by us herein above, even if, we consider that the AO had power or authority to inquire the as ..... 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