TaxTMI 
TaxTMI 
2002 (7) TMI 60
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....unal is correct in law in allowing investment allowance on ultrasound medical diagnostic electrical equipment, air-conditioner and servo voltage stabilizer?" The assessee, Dr. M. L. Agarwalla, is a qualified radiologist engaged in the business of x-ray diagnosis since the assessment year 1981-82. For the assessment year 1989-90, the assessee claimed deduction under section 32A of the Income-tax Act, 1961, in respect of plant and machinery purchased and installed by him in the aforesaid business. The Assessing Officer rejected the claim of the assessee for investment allowance of Rs. 1,95,960 in respect of ultrasound medical diagnostic electrical equipment, air-conditioner and servo voltage stabilizer on the ground that the assessee in the....
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....d activities". They are the result of the efforts and activities giving in black and white the internal position of different parts of the body for proper and efficient diagnosis. The exercise undertaken with the help of these machines for appropriate diagnosis is the effort or activity which in turn can be said to be the "thing" produced within the meaning of section 32A of the Act. The installation of the ultrasound diagnostic machine, in the opinion of the High Court, was for the purpose of the business of production of a "thing" and hence the assessee was entitled to investment allowance as per the provisions of section 32A. The reason available in Shaw Wallace and Co. Ltd.'s case [1993] 201 ITR 17 (Cal), is that having regard to the ....
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.... to show that a new article or thing is manufactured or produced out of some raw materials, it is difficult to hold that the assessee, Down Town Hospital, is an industrial undertaking. This decision in our opinion is not applicable in the instant case. The assessee claimed investment allowance as per the provisions of section 32A(2) for the ultrasound medical diagnostic electrical equipment, air-conditioner and servo voltage stabilizer and not for the entire establishment. The decision of the Rajasthan High Court in CIT v. Trinity Hospital [1997] 225 ITR 178 was rendered taking into consideration the ratio in Dr. V. K. Ramachandran [1981] 128 ITR 727 of the Madras High Court and Shaw Wallace and Co. Ltd. [1993] 201 ITR 17 of the Calcutta ....
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....covered by the expression "article" or "thing". The Calcutta High Court relying on the decisions in Trinity Hospital's case [1997] 225 ITR 178 (Raj) and in CIT v. Upasana Hospital [1997] 225 ITR 845 (Ker) answered the question in favour of the assessee. Similarly, in CIT v. Dr. L. C. Mitra [1998] 234 ITR 805, the Patna High Court held that investment allowance in respect of parts of x-ray machine is permissible under section 32A of the Act. The decision was rendered in consonance with the view of the Tribunal that parts of the machinery could certainly be considered as a plant though not as machinery and, as such, entitled to investment allowance under section 32A of the Act. In CIT v. Dr. S. Surender Reddy [2000] 243 ITR 110 (AP), it was h....