9911796707
TMI Blog1993 (4) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... production or manufacture of any article or thing. On appeal, the CIT(A) held that merely because the assessee's plant and machinery were used for doing job works of others, it cannot be said that it was not eligible to get investment allowance. For this proposition, he relied on the following decisions: (i) T. Venkateswara Rao Co. vs. ITO (1983) Taxation 70(6)-80; (ii) ITO vs. General's New Tread (1985) Taxation 79(6)-141; (iii) Sri Balaji Metal Finishers vs. ITO (1986) Taxation 80(4)-117; (iv) Durandel Foods P. Ltd. vs. ITO (1984) Taxation 72 (6A)-27. The CIT(A) further held that the assessee was manufacturing or producing a commercially different product, namely, masticated rubber and, therefore, it was engaged in the manufacture or production of an article or thing. Further it had complied with the other provisions of s. 32A of the IT Act and, therefore, the claim of the assessee for investment allowance cannot be rejected. The Revenue is on appeal against the order of the CIT(A). 3. Having heard rival submissions and perused the order of the CIT(A) we do not find any justification to interfere with the order of the first appellate authority. There is a prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not got the goods, which his customers have ordered and which he has agreed to sell. The process of dispensing is carried out for the purpose of producing the contract goods. When dispensing has taken place, but not before, the chemist has the goods with which to supply his customers and which he has agreed to sell to them. The resultant mixtures, after dispensing prescriptions, are the goods sold by a dispensing chemist to this customers; the process of dispensing is to produce those goods for sale, without which process sales of mixtures or compounds cannot be effected by a chemist. Even if that process is not the manufacture of goods, as articles of furniture, mechanical appliances and paints are made from raw materials, nevertheless, since it is the production of goods for the purpose of selling to customers, the chemist who dispenses prescriptions thereby produces goods for sale." Investment allowance is allowable whether the assessee is engaged in manufacture or production. So in either view of the matter, we hold that the assessee is entitled to the benefit of investment allowance. For these reasons, we dismiss the Revenue's appeal. 4. ITA No. 535/Coch/87 is the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope for offering some further incentives to the industries so as to encourage existing industries in the State and to attract new industries has been under the consideration of Government. 2. In this connection it was felt that the question of strengthening traditional industries which were labour intensive, rehabilitation of sick units and the promotional activities for the growth of new industries should be examined in depth for identifying the problems and for adoption of various measures necessary to promote industrial growth in the State. A Committee consisting of the following officers was, therefore, set up to study the various problems and submit report: 1. Sri R. Gopalaswamy, Commissioner for Economic Development 2. Sri V. Ramachandran, Chairman, Kerala State Industrial Development Corporation 3. Sri K.V. Ramakrishnan, Special Secretary (Industries) 4. Sri K.V. Rabindran Nair, Special Secretary (Finance) 5. Sri C.P. Nair, Secretary (Taxes) 6. Smt. J. Lalithambika, Additional Secretary (Industries); 7. Sri K.R. Rajen, Director of Industries Commerce 3. The Committee finalised its report on 20th March, 1979. 4. Government have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of subsidy received from the State Government should be excluded from the cost of the assets for purpose of computing depreciation and investment allowance. 7. The second issue in the assessee's appeals common to all the years is against the disallowance of expenditure incurred by the assessee for serving tea, snacks, etc., to its employees and bidders in the auction hall. The disallowance on this score was as follows: Assessment year Amount 1982-83 Rs. 2,385 1983-84 Rs. 16,349 1984-85 Rs. 20,829 It is contended before us that as the assessee has spent the amounts on auction bidders and also on its staff, the same will not partake of the nature of entertainment expenditure. Even if it is held to be entertainment expenditure, suitable allowance should have been given under s. 37(2) of the IT Act. The learned Departmental Representative relied on the orders of the CIT(A). 8. Having regard to rival submissions and the materials on record, we hold that 25% of the expenditure in question can be said to have been spent on the staff in connection with auction bidding. The rest of it, we hold, is in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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