TaxTMI 
TaxTMI 
1990 (4) TMI 116
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....981-82, the Income-tax Officer granted deductions under section 80J as well as investment allowance under section 32A subject to creation of reserve. 3. For the assessment year 1982-83, the Income-tax Officer rejected the claim for investment allowance but treated the assessee as an industrial company under the Finance Act for the purpose of levying tax at a concessional rate. 4. The Commissioner of Income-tax on a review of the aforesaid assessments held that the assessee was not entitled to investment allowance under section 32A and deduction under section 80J as well as concessional rate of tax for the assessment year 1981-82 and should not be treated as an industrial company for the purpose of concessional rate of tax for the assessme....
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.... objection has no basis because in terms of the provisions of section 80J the main section does not refer to the business of an industrial undertaking but only to the profits and gains derived from an industrial undertaking. Secondly, the condition in sub-section (4) again refers to manufacturing process carried on with the aid of power and employing ten or more workers. This condition is identical to the condition given in the definition of a factory in section 2(m) of the Factories Act and admittedly the assessee has satisfied this condition and has obtained the factory licence. Moreover, the objection that the articles produced were not meant for sale is met by the provisions of sub-section (6B) which provides that where any goods held f....
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....s and gains of the industrial undertaking could be separately deduced and, in fact, the Income-tax Officer is empowered to compute such profits and gains on a reasonable basis even if the profits are derived from captive industrial undertaking whose products are used in the composite business of the assessee. In the circumstances, we are satisfied that the assessee was rightly granted deduction under section 80J and we, therefore, cancel the finding in the order made under section 263 withdrawing the deduction granting under section 80J. 7. Coming to the treatment of the assessee as an industrial undertaking within the meaning of the Finance Act, we find that the definition of an industrial company is as follows :--- " (c) ' Industrial co....
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.... so as to be treated as an industrial company for the purpose of concessional rate of tax. 8. We now come to the claim of the assessee under sec. 32A. That section, however, is worded differently. There is no definition of an industrial company in this section. Section 32A merely states that the allowance is available for machinery installed after 31-3-1976 in an industrial undertaking for the purpose of business of manufacture or production of any article or thing. 9. The first contention of the revenue is that the main business of the assessee is that of repairing ships and such a business will not fall within scope of this section which refers only to manufacture or production of articles or things. It may at once be stated that by an ....
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....ible for the investment allowance under section 32A. A comparison of the wording of this section with those sections 80J and 80HH as well as the definition of ' industrial company ' in the Finance Act shows that this section 32A does not incorporate the defintion of a factory as in 80J or provide for the bifurcation of the industrial undertaking in the case of a captive unit where the business of the assessee is a composite business. It is also significant that this section does not refer to an assessee who is mainly engaged in the manufacture of articles as in the definition of an industrial company in the Finance Act. Therefore, a reading of the provisions of section 32A confines it to a case of an assessee whose business is manufacture o....