Cold storage processing is not manufacture for investment allowance under section 32A, so the claim was disallowed.

A cold storage business was not entitled to investment allowance under section 32A on additions to plant and machinery because mere processing of goods for preservation does not amount to manufacture or production. The statutory condition requires the plant or machinery to be used in a small scale industrial undertaking engaged in manufacture or production of an article or thing, and manufacture requires bringing into existence a new substance rather than a mere change in form or condition. The claim for investment allowance therefore failed, and the disallowance of that claim was upheld.

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Issues: Whether a cold storage business is entitled to investment allowance under section 32A on additions to plant and machinery on the footing that it is engaged in manufacture or production of articles or things.

Analysis: Investment allowance under section 32A is available only where the plant or machinery is used in a small scale industrial undertaking and in the business of manufacture or production of an article or thing. The mere processing of goods for preservation in a cold storage does not amount to manufacture, because manufacture requires bringing into existence a new substance and not merely effecting a change in the substance. A cold storage may involve processing, but that is not enough to satisfy the statutory requirement of manufacture or production.

Conclusion: The assessee was not entitled to investment allowance on the additions to plant and machinery, and the disallowance of that claim was .

Final Conclusion: The main claim for investment allowance failed, though the appeals were allowed only to the limited extent indicated in the order.

Ratio Decidendi: Processing of goods for preservation in a cold storage is not manufacture or production for the purpose of investment allowance under section 32A.

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