Investment ceiling for plant and machinery must be tested on unrebutted evidence before denying an eligibility certificate.
For rule 3(66) read with section 4AA, the expression "investment" in plant and machinery was treated as the relevant ceiling-based qualification criterion, and expenditure on leased machinery was argued not to fall outside that concept. On the material produced, the assessee's investment in plant and machinery was shown to be well below the prescribed limit, excluding land and building. A bare allegation that the purchase price was unreal because the transaction involved a sister concern was insufficient without supporting evidence to rebut the stated figures. The statutory benefit was therefore available and the eligibility certificate was due.
Issues: Whether, for the purpose of rule 3(66), the expression "investment" in plant and machinery included expenditure on leased machinery and whether the appellant's investment exceeded the prescribed monetary limit so as to justify refusal of the eligibility certificate.
Analysis: The relevant legal framework required the assessee to show investment up to the specified ceiling on plant and machinery, excluding land and building, to qualify for the certificate under rule 3(66) read with section 4AA. The Tribunal had treated lease-related expenditure as outside the concept of investment. On the material produced, the total investment on plant and machinery was shown to be substantially below the prescribed limit. The respondents offered only a bare assertion that the purchase price was unreal because the transaction was with a sister concern, but no supporting material was produced to displace the appellant's figures.
Conclusion: The appellant satisfied the investment requirement and was entitled to the eligibility certificate.
Ratio Decidendi: Where the statutory investment ceiling is materially undershot on unrebutted evidence, a bare challenge to the genuineness of the stated cost, without supporting material, is insufficient to deny the statutory benefit.
TaxTMI 
AI Drafter ✕
TaxTMI 
