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Issues:
1. Entitlement to investment allowance under section 32A(2)(iii) of the Income-tax Act, 1961 for a limited company running a clinical laboratory, X-ray unit, and pharmacy. 2. Interpretation of the provisions of section 32A(2)(b)(iii) of the Income-tax Act regarding the production of an article or thing for granting investment allowance. Analysis: The case involved a limited company operating a clinical laboratory, X-ray unit, and pharmacy, seeking investment allowance under section 32A(2) of the Income-tax Act for the X-ray plant installed during specific accounting years. The Income-tax Officer initially denied the allowance, stating that the X-ray plant was not used for the production or manufacture of an article. The Commissioner of Income-tax (Appeals) relied on a previous decision involving X-ray photography to support the allowance claim. The Income-tax Appellate Tribunal upheld the Commissioner's decision, prompting the Revenue to appeal the matter. The main issue revolved around the interpretation of section 32A(2)(b)(iii) of the Income-tax Act, which allows investment allowance for the production of an article or thing. The Tribunal's decision was based on the Special Bench's ruling in a similar case, but the High Court found the Tribunal's order vague and lacking clarity on the specific statutory provision considered. The High Court declined to answer the questions of law referred to it, directing the Tribunal to reexamine the case with precise reference to the applicable legal provisions and the relevance of the previous decision. The High Court emphasized the need for a clear analysis of the statutory provisions governing investment allowance eligibility under section 32A(2)(b)(iii) for the specific activities of the assessee. It highlighted the importance of accurately identifying the legal basis for granting such allowances and instructed the Tribunal to conduct a thorough review based on the relevant provisions. The Court refrained from expressing any opinion on the previous decision cited, focusing instead on ensuring a proper legal analysis in the reassessment by the Tribunal. In conclusion, the High Court declined to provide a definitive answer to the questions raised, urging the Income-tax Appellate Tribunal to reconsider the matter with precision and clarity regarding the statutory provisions applicable to the case. The Court's decision aimed to ensure a thorough and accurate assessment of the entitlement to investment allowance under section 32A(2)(b)(iii) for the assessee's operations, emphasizing the importance of legal clarity and specificity in such determinations.
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