1980 (11) TMI 102

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....port charges etc. These bulldozers were hired by the contractors in construction of roads, dams etc. The assessee claimed investment allowance under s. 32A of the IT Act, which requires that the new machinery or plant should have been installed after 31st March, 1966 "in any industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in 11th schedule". Sec. 32-A also requires that such machinery or plant should be "owned by the assessee and is wholly used for the purposes of the business carried on by him". The assessee claimed investment allowance of Rs. 2,35,577 in respect of the bulldozers purchased and installed during the yea....

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....n irrigation project entitled the assessee to a concession under s. 80 which required that the business should "manufacture or produce articles after the 31st Dec., 1970 in any backward area". The High Court rejected the contention that the construction of an irrigation project was not such manufacture or production. It was pointed out that the wording under s. 32A was even wider as the words include specifically "construction" also. As for the argument that the hiring out would disqualify the assessee, it was claimed that this is also a very narrow view. The assessee had hired out on the basis of time of actual use. The assessee was more or less a sub-contractor in substance, because it was not an outright hire, but hire related to the act....

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....nnot be said that the machinery on hire was used for the purposes of construction. It might have been used for purposes not warranted by s. 32A. It was further contended that the construction of roads and dams, the purposes allegedly for which the bulldozers were used, cannot come within the scope of s. 32A for the reasons stated by the first Appl. Authority. It was argued that only movable articles like ship, boilers, etc. can be qualified by the word "construction". A decision of this Tribunal in ITA No. 2539 (Mds)/73-74 dt. 24th Aug., 1974 was cited. In that case, it was held that the word "construction" under the then s. 33 (1)(b)(b)(i)(b) of the 1961 Act as it was available for asst. yr. 1972-73, qualified only ship or ships. It was fu....

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....tion, manufacture of production of any article or thing, not being an article or thing specified in the list in the 11th schedule". From these words, we are not able to infer that the "article or thing" should be in the same category or be similar to the articles mentioned in the 11th schedule. We are of the view that the word "construction" cannot be limited in such a way as to qualify only ships or boilers or such other things. "Thing" is a word which is very wide in its meaning. No doubt, the ld. Deptl. Rep. has confronted us with a decision of this Tribunal in justification of the narrow view. However, we cannot follow the said decision after the said decision of the Orissa High Court in CIT vs. N. C. Budharaja & Co. (121 ITR 212), wher....