AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
1992 (9) TMI 136
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.... The assessee in the present case is a Civil contractor. In my opinion the investment allowance is not admissible on account of following reasons :-- (a) The investment allowance is admissible to industrial undertakings only - whether small scale industrial undertakings or other industrial undertakings. Assessee in the present case is not industrial undertaking. It is a civil contractor firm, who is engaged in civil construction work for others. Essentially the assessee is providing his services/resources to the J. Ks in the construction of their factory building. (b) Even for arguments sake it is admitted that the assessee is a small scale industrial undertaking falling in clause (b)(ii) of sub-section (2) of section 32A, as the aggregat....
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....ed by the ITO in his order while rejecting the claim of the assessee under section 32A of the Act. 4. In this back ground the learned Senior Departmental representative argued that the assessee was in the first instance not an industrial undertaking but a civil contractor. Secondly even if it is accepted to be an industrial undertaking, it is a small scale industrial undertaking and hence being a contractor engaged in construction work is not entitled to get the benefit of investment allowance. He submitted that in the case of small scale industrial undertaking, the benefit is available to only those assessees who are engaged in the manufacturing or production of goods and not in the construction work. He pointed out that in the case of Mo....
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....or things and that those decisions were against the assessee. He, however, cited the following cases in which the decisions had been given in favour of the proposition that the contractors were entitled to benefit of investment allowance :-- 1. CIT v. N. C. Budharaja & Co.'s case 2. Shankar Construction Co. v. CIT [1991] 189 ITR 463 (Kar.) 3. CIT v. Bhageeratha Engg. Ltd. [1992] 193 ITR 674 (Ker.) 4. CIT v. Mahalinga Setty & Co. [1992] 195 ITR 526 (Kar.) 5. ITO v. Mohd. Miyan [IT Appeal No. 1234 (Jp.) of 1986]. 6. Progressive Engg. Co. v. ITO [1983] 3 ITD 172 (Hyd.) 7. ITO v. Hydle Constructions (P.) Ltd. [1983] 6 ITD 575 (Delhi) (FB) 8. Shah Construction Co. Ltd. v. [1986] 26 TTJ (Bom.) 378 9. Shah Engg. Co. v. ITO [1984] 20 TTJ (....
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....he ITO in his order regarding the treatment to be given to different assessees falling under clause (ii) or clause (iii) of section 32A(2)(b) of the Act. In fact, in the case of Mohd. Miyan there is nothing to show that any one of these items were argued and the learned Members of the Tribunal who had taken that decision had even observed that " the point is not free from doubt inasmuch as the assessee has not actually produced any article or things. However, two Benches of the Tribunal in T. Venkateswara Rao & Co. v. ITO [1983] Taxation 70(6) 80 and Progressive Engineering Co. v. ITO [1983] Taxation (70)(6A)-23 has (sic.) held that a firm doing business in a ballast material and execution or civil works or constructing a dam was entitled t....
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.... investment allowance. But this case was covered by sub-clause (iii) ; it was not a case of small scale industrial undertaking which is covered under sub-clause (ii) of section 32A(2)(b). Similarly in the cases of Bhageeratha Engg. Ltd. and Mahalinga Setty & Co. the issues involved were under sub-clause (iii). Shri Birla himself conceded that the issue that construction companies were not engaged in manufacturing or production of articles or things has already been decided against the assessee in the cases of R. S. Avtar & Co. and J. S. Construction Co. by the Delhi Benches of the Tribunal. In these circumstances the only issue which remains to be decided is whether a civil construction work contractor even if it falls in the category of a ....