2005 (10) TMI 546 - HC - Income Tax

Summary

Issues:
Claim for investment allowance under section 32A and additional depreciation under section 32(1)(iia) on computer machinery.

Analysis:
The case involves a firm engaged in the business of purchase and sale of pumps and electric motors, with a computer unit named M/s. Kay Cee Computers. The firm claimed investment allowance under section 32A and additional depreciation under section 32(1)(iia) for the computer machinery in the assessment year 1984-85. The Assessing Officer disallowed the claims stating that the computer was not used for manufacturing or production purposes and that the machinery was installed in the office premises of another company. The Commissioner of Income-tax (Appeals) upheld the firm's claims based on previous decisions. The Tribunal also dismissed the appeal by the Department, citing earlier decisions and the Bombay High Court's ruling in a similar case.

In the absence of representation from the respondent assessee, the Court considered its previous decisions in similar cases. Referring to a specific case decided on 30-9-2005, the Court ruled in favor of the assessee and against the revenue, following its earlier judgments. The Court upheld the firm's claims for investment allowance under section 32A and additional depreciation under section 32(1)(iia) for the computer machinery. The judgment was made without any order as to costs, in line with the previous decisions and the principle of consistency in such matters.