Interpretation of investment allowance and audit report requirements clarified in recent court ruling.

Commissioner Of Income-Tax Versus Jaideep Industries

Commissioner Of Income-Tax Versus Jaideep Industries - [1989] 180 ITR 81, 45 TAXMANN 444 Issues involved:
1. Interpretation of investment allowance u/s 32A for machinery and dies and moulds.
2. Compliance with the requirement of filing audit report u/s 80J(6A) along with the return of income.

Interpretation of investment allowance u/s 32A:
The case involved a dispute over the assessee's claim for investment allowance under section 32A of the Income-tax Act, 1961, for machinery purchased before and installed after March 31, 1976. The machinery and dies and moulds were valued at Rs. 1,82,254. The Income-tax Officer and the Appellate Assistant Commissioner allowed the investment allowance only for machinery purchased during the assessment year, not for dies and moulds. However, the Tribunal held that dies and moulds were part of machinery and as the machinery was installed after April 1, 1976, the entire amount was eligible for investment allowance. The Tribunal's decision was based on the clear provision that machinery or plant referred to in section 32A should be installed after March 31, 1976. Therefore, the first question was answered in favor of the assessee.

Compliance with audit report requirement u/s 80J(6A):
The second issue pertained to the requirement of filing the audit report along with the return of income as mandated by section 80J(6A). The provision explicitly states that the deduction claimed shall not be admissible unless the audit report is furnished along with the return. The court concluded that this requirement is mandatory. Consequently, the second question was answered in favor of the Revenue and against the assessee. The reference was disposed of without any order as to costs.