2004 (3) TMI 18

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....orthy J.- The applicant/assessee is engaged in the business of erection of plants, testing and commissioning of boilers, etc. For the assessment year 1986-87, the Assessing Officer disallowed the assessee's claim of investment allowance to the extent of Rs. 6,98,666 on the ground that the assessee had not manufactured an article or thing, as per section 32A of the Income-tax Act, 1961, and he was ....

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....n the facts and in the circumstances of the case, the Appellate Tribunal was right in coming to a conclusion that the assessee's business of construction and testing of plants and commissioning of boilers, would amount to manufacture of any article or thing, as per section 32A of the Income-tax Act?" While learned counsel appearing for the Department would place reliance on the ruling of this c....

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....the ruling reported in CIT v. K. S. Venkataraman and Co. [2000] 243 ITR 377, a Division Bench of this court has pointed out that section 32A of the Act, which confers the benefit of investment allowance, is a provision which is obviously meant to encourage industries to install new plant and machinery where such plant and machinery is utilised for the manufacture or process of articles and goods a....

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.... in the manufacture of other goods or articles, it is only proper that the matter is remitted back to the Assessing Officer for fresh consideration of such claim of the assessee. Due opportunity will be given to the assessee by the Assessing Officer and he will decide the issue on the basis of the materials to be produced by the assessee. If the Assessing Officer is satisfied that the machinery or....