TaxTMI 
TaxTMI 
2008 (4) TMI 32
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....ssee is a practicing Radiologist and he had installed an X-ray machine on which he claimed a deduction by way of an investment allowance under Section 32A of the Act. This was disallowed by the Assessing Officer and also by the Commissioner of Income Tax (Appeals). However, the Income Tax Appellate Tribunal (for short the Tribunal) while relying upon an order passed by the Nagpur Bench of the Tribunal in some other case came to the conclusion that the Assessee was entitled to the deduction under Section 32A of the Act. It is in these circumstances that the present reference is made to this Court. 3. It is not clear from the statement of the case whether the Assessee had purchased the X-ray machine for installation in his clin....
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.... not in agreement with the High Courts other than the Bombay High Court. 8. In Commissioner of Income Tax v. Trinity Hospital, [1997] 225 ITR 178, the Rajasthan High Court dealt with X-ray machines, ultrasound scanner etc. installed in a hospital/nursing home. The Rajasthan High Court proceeded to consider whether an X-ray machine, ultrasound scanner etc. produces or manufactures any article or thing. This question was answered in the affirmative and with regard to the question whether the hospital was a small scale industrial undertaking, reliance was placed upon Explanation (2) to Section 32A(2) of the Act, which provides as follows: - An industrial undertaking shall be deemed to be a small-scale undertaking , if the ....
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.... of an article or thing. 12. The Gauhati High Court in Commissioner of Income Tax v. Dr. M.L. Agarwalla, [2002] 258 ITR 102 followed the view expressed by the aforesaid three High Courts as well as the view expressed by the Madras High Court in Commissioner of Income Tax v. Prasad Productions (P.) Ltd., [2001] 247 ITR 445. The same view has been expressed by the Kerala High Court in Mar Gregorious Memorial Muthood Medical Centre v. Commissioner of Income Tax, [2003] 261 ITR 443 and by the Gujarat High Court in Commissioner of Income Tax v. Suresh and Family Trust, [2007] 288 ITR 101. 13. As mentioned above, the Bombay High Court has taken a different view in Insight Diagnostic and Oncological Research Institute Pvt. Ltd. v. Depu....
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....t be invoked. 15. In our opinion the expression industrial undertaking is to be used in the context in which it is used in the Income Tax Act and not in the context in which it is used in other laws such as the Industrial Disputes Act. If so understood, it cannot be said by any stretch of imagination or by the use of common English language, that a hospital or a clinic or a diagnostic centre or any such unit is an industrial undertaking. It may be that a machine or a plant within a clinic or a hospital or a diagnostic centre may manufacture or produce an article or thing; but that would not convert a clinic or a hospital or a diagnostic centre into an industrial undertaking. The unit must first be an industrial undertaking and it is then....