2000 (5) TMI 189 - AT - Income Tax

Summary

Issues:
1. Disallowance of claim for deduction under section 32AB by Assessing Officer.
2. Reversal of Assessing Officer's finding by CIT (Appeals) regarding deduction under section 32AB.
3. Emphasis on purchase of machinery for deduction under section 32AB.
4. Justification of allowing deduction under section 32AB by CIT (Appeals).
5. Consideration of submissions and orders by the authorities.

Analysis:
1. The Revenue's appeal contested the direction by CIT (Appeals) to allow the assessee's claim for deduction under section 32AB. The Assessing Officer disallowed the claim as the assessee had not purchased machinery during the previous year but had paid an advance amount.

2. CIT (Appeals) reversed the Assessing Officer's finding, emphasizing that the statute focuses on the utilization of the amount for machinery purchase during the previous year, not the actual purchase. The advance payment was deemed as utilization for machinery purchase, entitling the assessee to the deduction under section 32AB.

3. The learned D.R. argued that the emphasis in section 32AB is on the purchase of machinery, contending that paying an advance without actual purchase does not fulfill the deduction conditions. However, the Tribunal noted that the statute highlights the utilization of the amount for machinery purchase in the previous year, allowing for purchase after utilization.

4. The Tribunal upheld the CIT (Appeals) finding, stating that the ordinary meaning of the statute emphasizes utilizing the amount for machinery purchase in the previous year, regardless of the actual purchase timing. The assessee's purchase of the machinery following advance payment aligned with the statutory requirements for deduction under section 32AB.

5. The Tribunal rejected the adjournment application by the assessee, proceeding to decide on the appeal based on the submissions of the learned D.R. and the orders of the authorities below. The Tribunal found no grounds for interference, leading to the dismissal of both the appeal and the cross objection supporting the CIT (Appeals) decision.