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TMI Blog2015 (5) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law which was framed while the matter was admitted by this Court on 17.01.2001: "Whether on the facts and in the circumstances, the Tribunal has substantially erred in law in holding that the investment allowance under Section 32A of Rs. 11,38,286/- is not allowable to the appellant?" 2. The facts leading to the present tax appeal in a nutshell are set out as under: 2.1 The assessee Company which is engaged in the business of manufacturing of quartz parts for electronic watches claimed investment allowance to the tune of Rs. 11,75,190/- for assets installed between 01.04.1987 and 31.03.1988 the orders for which were placed before 12.06.1986. The Assessing Officer held that the appellant is not entitled to claim the investment allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the deletion of the disallowance made by the A.O on account of investment allowance of Rs. 11,38,286/-, the A.O has discussed the matter vide para 10 of the assessment order. The assessee claimed investment allowance of Rs. 11,75,190 under section 32A of the Income-tax Act on the ground that plant and machinery has been installed between 1.4.87 to 31.3.88 but the orders for such plant and machinery have been placed before 12.6.1986. The assessee furnished the following details with regard to the claim of investment allowance on the plant and machinery: Sr. No Description of Plant & Machinery Qty. Dt. of order Dt. of installation Total Cost 1 FS 80 Injection Moulding Machine AND FS 260 Injection Moulding Machine 1 02/05/8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the Tribunal has rightly held that no investment allowance is allowable on the machine in question u/s 32A(8B) of the Act. He submitted that the assessee failed to prove that the contract of purchase of machinery has been entered into before 12.06.1986. He submitted that the present appeal lacks merits and therefore deserves to be dismissed. 5. We have heard learned advocates for both the sides and perused the orders passed by the CIT as well as the Tribunal. Let us first examine the provisions of section 32A(8B) of the Act. The same is reproduced hereunder: "(8) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery or plant has been manufactured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant: Provided that nothing contained in sub- section (1) shall entitle the assessee to claim deduction in respect of a ship or aircraft or machinery or plant referred to in this clause in any previous year except the previous year relevant to the assessment year commencing on the 1st day of April, 1989 ; (b) a new ship or new aircraft acquired or any new machinery or plant installed after the 31st day of March, 1988 , but before such date as the Central Government, if it considers necessary or expedient so to do, may, by notification' in the Official Gazette, specify in this behalf. " 6. Having gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured in an undertaking owned by the assessee, taken steps for the manufacture of such machinery or plant, the same is permissible for disallowance. 7.1 The assessee had also furnished document showing advance payment of 10000$ to Nicks Shipping dated 31.05.1986. The CIT(A) in para 11.12 observed as under: "11.9 The learned counsel for the appellant then drew attention to the individual sales contract with Nissei Plastic Industrial Co. Ltd., dtd. 2nd May, 1986, and several other documents filed in the paper book at page 1 to 4 , to evidence that the appellant had entered into contract for the Plant & Machinery in May, 1986. 11.12 It is difficult to assume that all the exercise in the form of obtaining the other machineries which were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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