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Claim of investment allowance on capitalization of expenses related to plant and machinery. Analysis: The Revenue filed an appeal against the Tribunal's order regarding the assessment year 1990-91 under the Income-tax Act, 1961. The main contention was the allowance of investment allowance on an amount of Rs. 2,83,53,123 capitalized under "Plant and machinery." The Assessing Officer found that this amount did not have a direct relation to the purchase or installation of plant and machinery, as it included expenses like administrative charges, production charges, and expenses related to a public issue. Consequently, the claim of investment allowance was disallowed to that extent. Upon appeal to the Commissioner of Income-tax (Appeals), it was noted that the Assessing Officer had treated the said amount as the cost of machinery for depreciation purposes. The CIT(A) held that the Assessing Officer could not take a contradictory stand while allowing investment allowance. This finding was upheld by the Tribunal on further appeal by the Revenue. The counsel for the Revenue could not refute the fact that the amount in question had been considered as the cost of machinery for depreciation. Therefore, the High Court found no error in the orders of the CIT(A) and the Tribunal, emphasizing that the actual cost of machinery and plant for investment allowance had to be consistent. Consequently, the Court concluded that no substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal. In summary, the judgment focused on the disallowance of investment allowance on expenses capitalized under "Plant and machinery." The Court upheld the decision that the cost of machinery for investment allowance should align with the cost considered for depreciation, emphasizing consistency in treatment. The appeal by the Revenue was dismissed based on these findings.
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