TaxTMI 
TaxTMI 
2008 (2) TMI 284
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.... was right in holding that by crediting the partners, capital account by the amount standing to the credit of the investment allowance reserve account does not result in distribution by way of profit of such reserve in a case where the assessee has utilised the amount credited to the investment allowance reserve account for the purpose of acquiring new machinery and plant for the purpose of the business of the undertaking ? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that if out of three conditions as prescribed by the provisions of section 32A(5), one condition in clause (b) is satisfied and the other two conditions as mentioned in clause (a) and clause (c) are not satisfie....
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....ding to the credit of investment allowance reserve account. That the transfer of the amount of reserve thereafter to the capital account of the partners did not constitute violation of any of the provisions contained in section 32A(5) of the Act. 4. The Revenue carried the matter in second appeal before the Tribunal. The Tribunal, for the reasons stated in order dated December 2, 1993, upheld the order made by the Commissioner (Appeals) by placing reliance on the decision of this court in the case of CIT v. Karamchand Premchand P. Ltd. [1993] 200 ITR 281. 5. Heard Mr. B. B. Naik, learned standing counsel for the applicant-Revenue and Mr. S. N. Divatia, the learned advocate for the respondent-assessee. 6. The controversy revolves ar....
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....reading it becomes apparent that any investment allowance granted under section 32A of the Act shall be deemed to have been wrongly granted if any one of the three conditions laid down in clauses (a), (b) and (c) are shown to have been violated. Clause (a) entitles the Assessing Officer to withdraw the investment allowance if the ship, aircraft, machinery or plant is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which the ship, etc. was acquired or installed. Similarly, under clause (b) if at any time before the expiry of ten years from the end of the previous year of acquisition or installation, as the case may be, the assessee does not utilize ....
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....hinery and plant had taken place before the expiry of ten years from the end of the previous year in which the machinery or plant had been installed for which investment allowance had been granted. That year is samvat year, 2041, i.e., eight years from samvat year 2033. 9. It is nobody's case that there is any violation of the conditions stipulated by clause (a). Similarly, in the light of the facts noted hereinabove, there is no violation of the conditions stipulated by clause (b), the only question that would survive is as to whether there is any violation of the condition stipulated by clause (c). In this regard the Tribunal has found, and rightly so, the amount credited to the reserve account having already been utilized for the purp....