Original fixed capital investment under diversification exemption means initial unit investment, not later aggregate investment.

The expression "original fixed capital investment" under the diversification exemption scheme means the initial capital investment made when the unit was established, not the total investment subsisting when the later exemption claim is made. The provision requiring additional fixed capital investment of at least twenty-five per cent was read in its ordinary sense and purposively as an incentive measure, so the later diversification investment had to be measured against the original investment base. The assessee was therefore entitled to consideration of exemption on that basis.

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Issues: Whether, for the purpose of exemption under the diversification scheme, the expression "original fixed capital investment" means the initial investment made at the time of establishment of the unit or the total investment subsisting on the date of the subsequent claim for exemption.

Analysis: Section 4A and the relevant explanation required an additional fixed capital investment of at least twenty-five per cent of the "original fixed capital investment". The expression "original" was construed in its ordinary and grammatical sense as meaning initial or first in point of time. The exemption provision was an incentive measure intended to promote industrial growth and production, and therefore had to be read reasonably and purposively so that the benefit was not defeated by a strained construction. On that basis, the additional investment for a later diversification was to be tested against the initial fixed capital investment and not against the aggregate investment as on the date of the later claim.

Conclusion: The expression "original fixed capital investment" refers to the initial capital investment made at the time of establishment of the unit, and not to the total investment as on the date of the subsequent diversification claim. The assessee was entitled to consideration of exemption on that basis.

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