1992 (2) TMI 17

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.... assessee, a limited company was deriving income from beverages. The assessee installed a generator in its factory to supply power to the main plant during the course of failure in the supply of electricity. The Assessee claimed investment allowance on the generator. The Inspecting Assistant Commissioner of Income-tax disallowed the claim on the ground that the generator at best gave indirect assistance for the manufacturing process during the period of power failure. The assessee did not manufacture or produce any article or thing as envisaged in section 32A of the Income-tax Act, 1961. Being aggrieved by the order of the Inspecting Assistant Commissioner of Income-tax, the assessee filed an appeal before the Commissioner of Income-tax (A....

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.... looked into and it was not very clear with reference to the manufacturing process of the assessee. The manufacturing process of the assessee appears to be different from the manufacturing process given in item No. 5. Under the said circumstances, the assessee was entitled to investment allowance and, therefore, the finding of the Commissioner of Income-tax (Appeals) is maintained." At the hearing before us, our attention has been drawn to a decision of this court in CIT v. Peerless Consultancy Services (Pvt.) Ltd. [1990] 186 ITR 609, where it has been held that, because the assessee in that case was an industrial company within the meaning of section 2(7)(c) of the Finance Act, 1981, it was entitled to investment allowance in respect of t....

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....h blended flavouring concentrates in any form are used." It, however, appears that the assessee's learned counsel asserted before the Tribunal that the assessee was not manufacturing " aerated waters " in which blended flavouring concentrates were used. It is manufacturing aerated waters out of synthetics. This indicates that the assessee's manufacturing process involved use of synthetic elements. An Explanation below item No. 5 was inserted by the Finance Act, 1987, with effect from 1988 which clarified what the Legislature meant by the expression " blended flavouring concentrates." According to that Explanation, the concentrates referred to "shall include, and shall be deemed always to have included, synthetic essences in any form." Bef....