2005 (3) TMI 77

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.... law under section 256(1) of the Income-tax Act, 1961, for opinion to this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal erred in law in holding that the investment allowance was allowable to the assessee under section 32A on generator?" The reference relates to the assessment year 1986-87. Briefly stated, the facts giving rise to th....

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....5 and 1985-86. The order of the Commissioner of Income-tax (Appeals) has been upheld by the Tribunal. We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue. Nobody has appeared on behalf of the respondent-assessee. Learned standing counsel submitted that as the generator has not been used for the purpose of manufacture or production of any article or thing, it is not plant....

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....f which the deduction by way of development rebate has been allowed or where the actual cost of which is allowable as deduction by way of depreciation or otherwise while computing the income chargeable under the head "Profits and gains of business or profession" of any one previous year. Sub-section (2) of section 32A of the Act specifies the ship or aircraft or machinery or plant eligible for inv....

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....(2) of section 32A of the Act reproduced above, it is clear that any machinery or plant which has been installed for the purpose of business of manufacture or production of any article or thing not falling under the second proviso to section 32A of the Act is entitled for investment allowance. The words "business of manufacture" or "production" are very wide terms and would encompass the whole set....