TMI Blog1986 (11) TMI 71X 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, the learned Commissioner (Appeals) ought to have held that construction of road does not amount to manufacture or production of an article or thing. 3. On the facts and in the circumstances of the case, the learned Commissioner (Appeals) ought to have held that the assessee is not entitled to investment allowance in respect of the road roller purchased by the assessee for construction of road. " 2. The assessee admittedly is a firm of contractors. The ITO in the course of the assessment proceedings observed that the assessee had claimed investment allowance of Rs. 60,082 in respect of a road roller of the value of Rs. 2,40,328. In support of the claim, the assessee contended : (1) that this w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t both labour and machinery were used for road construction work. It was also submitted that items used in the 'manufacture' of a road were (1) hot mix plate, (2) paver finisher, and (3) road roller. It was further contended that the following three tests laid down were also fulfilled : (1) That a commodity was produced. (2) That the process involved labour as well as machinery. (3) That the end-product was different. 5. The assessee supported his arguments with the following authorities CIT v. M.R. Gopal [1965] 58 ITR 598 (Mad.), CIT v. Lakhtar Cotton Press Co. (P.) Ltd. [1983] 142 ITR 503 (Guj.) and Idandas v. Anant Ramchandra Phadke AIR 1982 SC 127. 6. The learned Commissioner (Appeals) allowed the claim of the assessee as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following decisions : CIT v. Ajay Printery (P.) Ltd. [1965] 58 ITR 811 (Guj.), Progressive Engg. Co. v. ITO [1983] 3 ITD 172 (Hyd.), Nishit Synthetics (P.) Ltd. v. ITO [1984] 7 ITD 486 (Ahd.), Shri Raj Kumar Singh Co. v. ITO [1986] 16 ITD 202 (All.) and First ITO v. Dr. P. Vittal Bhat [1983] 6 ITD 560 (Bang.) (SB). The learned counsel also sought to distinguish the decision in Shah Construction Co. Ltd.'s case and relied upon by the departmental representative. 9. We have considered the rival submissions and at the outset we hold that the decision in Shah Construction Co. Ltd.'s case was considering whether the assessee-company was either wholly or mainly engaged in the manufacture or processing of goods. This issue is not before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 'thing' mentioned in section 32A(2)(b)(iii) need not be confined to movable property only. It was further held that the addition of the word 'thing' coupled with the use of the word 'construction' made the assessee's eligibility to the claim on account of investment allowance clearer. In the case of Shri Raj Kumar Singh Co. the Tribunal allowed the claim of investment allowance to an assessee who was assisting the main contractor engaged in the construction of mine roads for purposes of quarrying, blasting, collecting, carriage and stocking of boulders and metal. 10. In both the above decisions it may be noticed that the assessees were carrying on composite activities of various types leading to the main activity of construction of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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