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TMI Blog1991 (3) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... be pointed out that the CIT(A) did not allow the assessee's claim for deduction under s.80HH and 80J. It is ex facie clear from para 6 of his order that after holding that the assessee was running two industrial undertakings, he directed the ITO to find out whether the assessee satisfied the conditions laid down by and under the said sections. In other words, the CIT(A) has merely remitted the matter on these two counts back to the files of the ITO. 4. Shri R. Srinivasan, the learned representative for the assessee, drew our attention to the fact that, on examining the matter as directed by the CIT(A), the ITO had negatived the assessee's claim on these two counts. 5. In view of the foregoing, therefore, we hold that in so far as thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erations: (i) Admittedly the plant and machinery in question were owned by the assessee firm; (ii) They were wholly used for the purposes of the manufacturing business carried on by it; (iii) They were not used in the contract business of the assessee firm; and (iv) The assessee has also created necessary reserve. 8. Shri C. Abraham, the ld. Sr. Deptl. representative, strongly contended that the assessee was not entitled to investment allowance on the plant and machinery in question. In this regard, he highlighted the fact that the ITO had given a specific finding that the mosaic and the wood work units were auxiliary units, the products of which were wholly used in the construction business of the assessee This finding of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships. In this case, the making of door and window frames and of concrete beams and slabs was admittedly in the process of the construction and repair of buildings. There was no scope for dividing the business of the company into two parts, for neither the frame nor the slabs or beams were manufactured or prepared independently of the buildings or sold as such in the market. The Tribunal was, therefore, erroneous in its conclusion that the assessee-company fell within the definition of an "industrial company" as given in s. 2(7)(d) of the Finance Act, 1966". 11. According to Shri Abraham, the ratio of the said case would apply equally to the case before us. He, therefore, urged that the Department is entitled to succeed. 12. On his pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to the provisions of that section. Briefly stated, under that section, a small scale industrial undertaking is entitled to investment allowance on the plant and machinery, which is owned by it and is wholly used for the purpose of the business of manufacture or production of any article or things. There is, of course, a significant rider that the assessee will not be entitled to investment allowance if any one of the four situations contemplated by the proviso to s.32A(1) is found in a case. 14. Sec. 32A(4) lays down the other conditions to be fulfilled by an assessee seeking the benefit of investment allowance. 15. In the case before us, it is common ground that none of the contingencies contemplated under the proviso to s. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking for the purpose of manufacture or production of any article or thing. That section does not contain any further stipulation as to the end user of the article or things produced. For example, there is no stipulation to the effect that the article or thing produced must invariably be sold to outsiders. There is no stipulation either to the effect that the article or thing produced should not be used by the assessee in a business in respect of which investment allowance is not provided for. 19. The rationale behind the provision of investment allowance is clear and that is to give fillip to industrial development. Small scale industry naturally has an important role to play in the industrial development of a nation. And as long ..... X X X X Extracts X X X X X X X X Extracts X X X X
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