TMI Blog1992 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... m for the manufacture of article or thing, investment allowance was allowable under section 32A ? " The assessee is a company. During the previous year relevant to the assessment year, the assessee had acquired machinery. It had been leased on hire purchase basis. The assessee itself had not manufactured any article or thing. The machinery had been used by different persons (lessees ) for the purpose of their business of manufacturing. In respect of the machinery, the assessee claimed investment allowance under section 32A. The Income-tax Officer refused the claim on the ground that the assessee had not manufactured any article or thing as required under section 32A(2)(b)(iii). The assessee preferred an appeal and the Commissioner (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y). There are other conditions to be satisfied depending upon the date of acquiring the subject-matter. The concept of " new machinery or plant " includes machinery or plant used outside India, but used in India for the first time. The main conditions to be satisfied as per section 32A(1) and (2) are: (1) The subject-matter is to be owned by the assessee. (2) The subject-matter is wholly used for the purposes of the business of the assessee ; and (3) The subject-matter should come under any of the enumerated categories as per section 32A(2). We are concerned with the "machinery" which is owned by the assessee. Machinery is used in the business of the assessee because, the business of the assessee is leasing out machinery. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estment allowance granted as a beneficial provision to encourage fresh investment. The scheme of the section shows that machinery is entitled to be considered for the benefit at least once ; therefore, even old machinery imported into India is eligible to be considered for the benefit of the provision. However, if a machinery has already been used in India, the assessee cannot claim the benefit of section 32A(1) once again, only because, for the said assessee, it is a new acquisition. Section 32A is a beneficial provision in a taxing statute and full effect has to be given to the language used by Parliament. It is a maxim of universal application governing the construction of fiscal legislations that, " in a taxing Act, one has to look me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and which has no connection with their being dependent on him or with any property transferred to them it should be included in the expenditure of the assessee. The position would be similar where the wife is the assessee and the expenditure incurred by the husband comes to be included in computation of her liability to tax because the word used is spouse in section 2(g)(i). But it must be remembered that logic or reason cannot be of much avail in interpreting a taxing statute." The last sentence in the above observation requires a rigid adherence to the language used in a taxing statute. It is also true that the machinery provisions in a taxing statute need not be construed by the above rules of strict construction and ordinary r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " entirely " and not exclusively. The machinery in its entirety may be used by its owner and it is possible for another also to use it. (vide : CIT v. Hindusthan Aluminium Corporation Ltd. [1989] 176 ITR 206 (Cal) and Punjab National Bank Ltd. v. CIT [1983] 141 ITR 886 (Delhi)). Assets "wholly used" do not mean exclusively used ; it means, used in their entirety-vide CIT v. Pandyan Bank Ltd. [1969] 71 ITR 707 (Mad) at page 712. Therefore, it cannot be said that, in the instant case, the machinery was not wholly used by the assessee by leasing it in the course of its business of leasing. However, that does not conclude the matter because of section 32A(2). The question is whether the machinery is to be installed in any industrial undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for the investment allowance to be granted to the person who owns the machinery, provided the owner uses it in its entirety in his business. The benefit is given with reference to the actual user of the machinery, though the benefit may go to a person who does not exploit the machinery, himself, for manufacturing or producing any article. Such a situation is not entirely unknown in the field of taxation. If the object behind section 32A is understood as to encourage industrial activities and investment in capital goods to facilitate industrial developments, the provision would certainly bear the meaning we have attributed to it. In these circumstances, we answer the question referred in the affirmative and against the Revenue. Refe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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