TMI Blog1991 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of the case and having regard to the fact that there was a change in the shareholding of the assessee-company, the Tribunal was right in law in allowing carry forward of the unabsorbed depreciation and unabsorbed investment allowance under section 79 of the Income-tax Act, 1961 ? " The assessee is a private limited company which owns a factory at Jhargram with its head office at Calcutta and had no manufacturing business of its own with its own machinery since its incorporation. By virtue of an agreement dated November 1, 1969, with M/s. Sakbry Engineering Corporation, a firm in which a director of the assessee-company was a partner, the assessee-company had agreed to work as rolling contractor to take over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to April 1, 1981, was not entitled to additional depreciation. Further, there was change in the original management of the assessee-company. Against the aforesaid order of the Income-tax Officer, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who found that, since the purchase of the machinery, there was a change in the management of the assessee-company and the machines were under installation and the installation process was completed during the year under reference. The Commissioner of Income-tax (Appeals), therefore, directed the Income-tax Officer to allow investment allowance on the entire machinery valued by the assessee at Rs. 6,50,050 and also to allow additional depreciation under section 32(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Commissioner of Income-tax (Appeals) on this point. During the hearing before us, Mr. Mitra, learned counsel for the Revenue, has contended that the finding of the Tribunal that the machinery and plant was new is not supported by any evidence on record. He has further submitted that the machinery in question was purchased long ago and it could not be treated as new machinery and plant and the objective of section 32A or 32(1)(iia) is to grant the benefit of investment allowance or additional depreciation allowance, as the case may be, on new plant and machinery. We are, however, unable to accept the contention of Mr. Mitra for more than one reason. Firstly, the finding of the Tribunal that the plant and machinery was new has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty-five per cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee ; " (emphasis supplied) It will be evident that what is relevant and material is the year of acquisition in the case of ships or aircraft and the year of installation in the case of machinery or plant. If the installation of a plant is spread over more than a year, the relevant year for the grant of allowance would be the year in which the installation is completed. As in the case of investment allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired for the purpose of claiming additional depreciation allowance or investment allowance. Our attention has been drawn to the decision of the Punjab and Haryana High Court in the case of CIT v. Jaideep Industries [1989] 180 ITR 81, where it has been held that the assessee is entitled to the benefit of section 32A, if the machinery or plant is installed after April 1, 1976. For the reasons aforesaid, we answer the first question in this reference in the affirmative and in favour of the assessee. So far as the second question is concerned, it is now concluded by a decision of this court in the case of this assessee in I.T.R. No. 92 of 1988, where the judgment was delivered on November 21, 1990. Following the said decision, we answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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