TaxTMI 
TaxTMI 
2007 (1) TMI 124
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....t construction, manufacture or production of ropeways was not the business of the assessee but it was only a means for transporting the timber etc. of a third party from one place to another and consequentially not entitled to investment allowance under section 32A of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that ropeways were road transport vehicles as contemplated by proviso (b) to section 32A(1) and, therefore, not entitled to investment allowance?" At the time of hearing of the petition, the petitioner sought to redraft the questions of law in the following manner: "1. Whether under the facts and circumstances of the case the Tribunal was justifie....
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....he facts as noticed in the case are that the petitioner is engaged in the business of manufacture of ropeways and also from transport business carried on by installing the ropeways during the year in question. The assessee entered into a contract with M/s. Babu Ram and Sons on September 12, 1979 whereby she agreed to put up a ropeway in forest Gawas, UP 54 and 55, Kheshdhar Range of Rohroo Forest Division for the purpose of transportation of B. L. Timber Billets of all sizes belonging to M/s Babu Ram and Sons on contract basis on the terms and conditions agreed therein. For the purpose of putting up these ropeways, the assessee purchased various materials consisting of wire ropes, driving units (i.e., engines, differentials, gearboxes, brak....
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....he assessee, and Shri S. K. Garg Narwana, learned counsel for the Revenue. The relevant provisions of section 32A of the Act, as existed at the relevant time are extracted below: "32A.(1) In respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, ....
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....f construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule." A perusal of the provisions of section 32A of the Act shows that 25 per cent. of the actual cost of ship, aircraft, machinery or plant to the assessee is allowable as deduction by way of investment allowance. It further provides that in the case of new machinery or plant installed after March 31, 1976, the same should be in a small scale industrial unit for the purpose of business of manufacture or production of any article or thing. The contentions raised by counsel for the assessee are that it is not disputed that the assessee is a small scale industrial unit. She purchased machinery, whic....