TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether the assessee's construction activity entitled it to investment allowance under section 32A of the Income-tax Act, 1961. (ii) Whether rule 3(c) of the Companies (Acceptance of Deposits) Amendment Rules, 1981 applied to the accounting period ending before its commencement.
Issue (i): Whether the assessee's construction activity entitled it to investment allowance under section 32A of the Income-tax Act, 1961.
Analysis: Investment allowance under section 32A is available only where the activity amounts to manufacture or production of an article or thing within the statutory framework. The activity in question consisted of construction work and did not answer the requirement of manufacture or production. On that basis, the claim for investment allowance could not be sustained.
Conclusion: The assessee was not entitled to investment allowance under section 32A; the answer was in favour of the Revenue.
Issue (ii): Whether rule 3(c) of the Companies (Acceptance of Deposits) Amendment Rules, 1981 applied to the accounting period ending before its commencement.
Analysis: The rule came into force on 1 April 1981, whereas the relevant accounting period had ended earlier. A delegated rule cannot operate retrospectively in the absence of express provision, and the amendment could not govern a period that had already concluded before its commencement.
Conclusion: Rule 3(c) did not apply to the relevant accounting period; the answer was in favour of the assessee.
Final Conclusion: The reference was answered partly for the Revenue and partly for the assessee, with the investment allowance issue decided against the assessee and the deposit-rule issue decided in its favour.
Ratio Decidendi: A construction activity not amounting to manufacture or production does not qualify for investment allowance under section 32A, and a newly enforced subordinate rule does not apply to an accounting period that ended before its commencement absent clear retrospective effect.
TaxTMI 
