TaxTMI 
TaxTMI 
TaxTMI 
2008 (8) TMI 99
X X X X Extracts X X X X
X X X X Extracts X X X X
....A. No.10 (Alld.) /1993). For the assessment year 1985-86, the Tribunal has referred the same questions under section 256(1) of the Income-tax Act for opinion of this court: "1. Is the Appellate Tribunal legally correct in holding that producing cold chilled air in the cold storage of the assessee does not amount to 'production or a thing' within the meaning of the said expression in section 32A of the Income-tax Act, 1961 ? 2. Is the Appellate Tribunal legally correct in refusing to accept that refrigerated condition can be brought in existence only by making or causing it to be produced?" 2. The facts and circumstances are identical for the three assessment years, hence all the references are being disposed of by this consolidated order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nto existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods. 6. He further relied upon the ratio laid down by the Gujarat High Court in CIT v. Suresh Amin Family Trust [2007] 288 ITR 101, where it was observed that the assessee was entitled to investment allowance on the expenditure incurred for the equipment. He continues to rely on the ratio laid down in the case of Karnataka Pawnbrokers' Association v. State of Karnataka [1998] 7 SCC 707, where it was observed that any activity incidental or ancillary to the main business will also come within the definition of "business" under the Sal....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Upasana Finance Ltd. [2006] 286 ITR 179, 181 (Mad), where depreciation was allowed on the printing cylinders, sintex shipper ice box, MS Bins etc., as each asset is a plant. 10. With the above mentioned case law, the learned counsel for the assessee submitted that the chilled air is an intermediate product. It may not have independently marketable value, but investment allowance will have to be allowed, as already prayed. To conclude, the learned counsel for the assessee, Sri Ravi Kant, made a request that the investment allowance may kindly be allowed for the assessment years under consideration. 11. On the other hand, Sri A. N. Mahajan, learned counsel for the Department, relied upon the orders of lower authorities as well as the Trib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taking. By producing chilled air, the assessee claims investment allowance under section 32A of the Act. In the similar case, the claim of the assessee was denied in the case of CIT v. Kothiwala Cold Storage [1993] 199 ITR 399 (All), where it was observed that no manufacture or production of any article or thing was involved in the cold storage. Hence, the assessee was not entitled to investment allowance under section 32A of the Act. Further the Punjab and Haryana High Court in the case of CIT v. Kissan Friends Ice Factory and Cold Storage [1998] 234 ITR 400 [FB] observed that (headnote): "A perusal of clause (b) (iii) of section 32A(2) of the income-tax Act, 1961, makes it clear that a machinery or plant is eligible for investment allowa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....illed air. In fact, the chilled air is required to maintain the temperature for healthy preservation of the items stored in the cold storage. 17. The hon'ble Supreme Court in the case of Delhi Cold Storage P. Ltd. v. CIT [1991] 191 ITR 656, observed that in common parlance, "processing", is understood as an action which brings forth some change or alteration of the goods or material subjected to the act of processing by observing that (headnote): "In a cold storage, vegetables, fruits and several other articles which require preservation by refrigeration are stored. While, as a result of long storage, scientific examination might indicate loss of moisture content, that is not sufficient for holding that the stored articles have undergone ....