TMI Blog1991 (3) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery used in the construction or only on that part of the machinery which is used for fabricating articles used in construction ?" The assessee is a contractor who is engaged in the work connected with the Krishna Project. The assessee claimed various deductions including investment allowance under section 32A of the Act. One of the items claimed by the assessee pertained to a sum of Rs. 2,270 in respect of general machinery which were used in the work taken by the assessee. This was granted. The first question referred above pertained to this allowance. Mr. G. Chanderkumar, learned counsel for the Revenue, initially contended that as the first question pertains to a different aspect of the case, ultimately, he had to agree that the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to section 32A(1) states that no deduction shall be allowed in respect of certain machinery or plant installed in the office premises or in respect of road transport vehicles, etc. Sub-section (2) of section 32A was strongly relied upon by learned counsel for the Revenue to contend that the machinery which is eligible for the investment allowance is machinery which produces an article. In other words, the machinery should be directly employed to produce an end product. It was contended that the machinery used just to lift earth and transport the same would not be the machinery contemplated by sub-section (2) which creates the eligibility for investment allowance. Learned counsel referred to sub-clause (iii) of clause (b) of sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehend incorporeal assets also." In fact, the Bench observed that the word "thing" would include balance at credit to a person in a bank. In CIT v. N. C Budhraja and Co. [1980] 121 ITR 212, the Orissa High Court held that construction of a dam will be the construction of an article. It was pointed out that the term "article" need not be confined to movable property only. A wider meaning was given to the word "article" for the purpose of section 80HH of the Act. The purpose of section 32A is to provide for the grant of investment allowance in respect of machinery which is used for earning the income which is taxed under the Act. The impugned provision of section 32A(1) itself indicates that any machinery wholly used for the purpose of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this court has already given a finding in favour of the assessee in that regard. The contention of learned counsel for the Revenue, that only the machinery which directly produces an end product is eligible for investment allowance, also cannot be accepted, having regard to the phraseology of section 32A(2)(a) as well as section 32A(2)(b)(iii). Both these provisions refer to the machinery used for the purpose of business. The purpose of business includes every activity which is necessary to carry on the business. It is not the final touches involved in a construction work that result in carrying on of the business. The various activities from the beginning to the end will be part of the business. Therefore, the decisions CWT v. K. Laksh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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