TMI Blog2006 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ace was totally demolished and a new one was constructed in its place, which finding has not been challenged by raising a separate question of law - On the findings recorded by the Tribunal, we are of the considered opinion that inasmuch as a new furnace has come into existence, the assessee was rightly allowed investment allowance under section 32A - - - - - Dated:- 3-1-2006 - Judge(s) : R. K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,23,415 and claimed investment allowance thereon under section 32A of the Act. The Income-tax Officer did not allow the claim as in his opinion this amounted to replacement of an old furnace by a new furnace and that the asset, which was brought into existence, could not be said to be a new asset. The Income-tax Officer, however, granted normal depreciation and extra-shift allowance on this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pairs, then the entire amount should have been allowed as an expenditure by withdrawing the depreciation allowed as well as the extra-shift allowance and not having done that, another inconsistency was committed. It was then pointed out that the assessee actually constructed a new furnace at a concessional cost and that should have been treated as a new asset and investment allowance should have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision, the Tribunal held that by incurring this expenditure, the assessee brought into existence a furnace of an improved version with proven life, which was made possible by structural alterations. The Tribunal noticed that the assessee incurred a loss of about Rs. 1,54,000 in the demolition and that amount was claimed as a loss, which according to the Tribunal proved that the old furnace was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding has not been challenged by raising a separate question of law. On the findings recorded by the Tribunal, we are of the considered opinion that inasmuch as a new furnace has come into existence, the assessee was rightly allowed investment allowance under section 32A of the Act. We accordingly answer the question of law referred to us in the affirmative i.e., in favour of the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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