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TMI Blog2008 (9) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Appellate Tribunal was right in law in allowing the Investment allowance of Rs.4,06,822/- and interest of Rs.18,575/-." 2. The assessee claimed investment allowance under Section 32A (2) of the Income Tax Act, 1961 (for short "the Act") for the year 1977-78. The Assessing Officer came to the conclusion that the assessee was entitled to the said investment allowance. On 12.3.1979 the Inspecting Assistant Commissioner of Income-tax (Assessment) issued a notice under Section 154 of the Act stating that the aforesaid benefit of investment allowance being inadmissible, he was proposing to file a rectification application. The response of the assessee was considered satisfactory since no application for rectification was made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery'. She further contended that 'industrial and agricultural machinery' has not been defined in the Act. Therefore, one has to take in aid the provisions in the other relevant Acts and if that be done, the First Schedule to the Industries (Development and Regulation) Act, 1951 becomes relevant and of assistance. In item 8 the First Schedule to the Industries (Development and Regulation) Act, 1951 it is provided that textile machinery (such as spinning frames, carding machines, power-looms and the like) including textile accessories are major items of specialised equipment used in specific industries. In view of these provisions, she submitted that the decision arrived at by the Income-tax Officer at the time of original assessment after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing terms ([1972] 102 ITR (ST.) 93,95) :- " .... I have, therefore, decided to introduce a scheme of investment allowance for certain priority industries. The present scheme of initial depreciation allowance will be replaced by a system of investment allowance. The investment allowance will be allowed at the rate of 25 per cent of the cost of acquisition of new machinery and plant installed after 31st March, 1976, in industries currently qualifying for initial depreciation. I also propose to extend the list of qualifying industries by including eight other priority or export-oriented industries, namely, carbon and graphite products; inorganic heavy chemicals; organic heavy chemicals; synthetic rubber and rubber chemicals, including carbon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstalled for the purposes of the second paragraph of clause (vi) and clause (via) and, consequently, the expenditure incurred in their purchase and in substituting them for the old spindles would be entitled to development rebate." 9. Learned counsel for the revenue relied on a Division Bench judgment of Karnataka High Court in Assistant Commissioner of Commercial Taxes-cum-Entry Tax (Assessment-1) Bangalore and another vs Mysore Industrial Supplies reported as [1997] 106 STC 585, wherein it was held as follows :- "Ball-bearings may be used as parts or accessories of industrial machinery also, but they are used in every type of machinery, toys and even in other contrivances. In common parlance, ball-bearings are not understood as parts or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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