1998 (10) TMI 15

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....ion 32A(1)(a) against the deduction in respect of the plant and machinery installed in office premises ?" The assessment year is 1985-86 : The assessee is engaged in the business of processing data with computers and the preparation of balance-sheets and financial accounts, etc., for its customers. Investment allowance was claimed by the assessee for the computers installed for the purpose of its business. That claim was disallowed by the Income-tax Officer on the ground that a computer is only a processor and no manufacture or production of article or thing is involved when that process is performed by the computers. The Commissioner rejected the assessee's appeal. The Tribunal having allowed further appeal of the assessee, this referenc....

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....pable of being regarded as part of the process or production. The balance-sheets, sales analysis, statements, etc., obtained as a result of processing are movables and are different from the data that was initially fed into the computer though based upon the data so fed in. The use to which the end-product is put is different from the one to which the raw data is put at the time it is fed into a computer. The end-products obtained as a result of data processing such as balance-sheets, etc., are therefore capable of being regarded as new articles. The data processing activity is an organised activity. The machines have to be operated by employing persons trained for that purpose. The employee and employer relationship in running a data proc....