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TMI Blog1986 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing investment allowance. When the income from machinery or plant which is hired to a third party is assessed under the head 'Profits and gains of business or.profession' in such case investment allowance is admissible while computing the income from business or hiring of plant and machinery. He followed the decision of the Allahabad High Court in the case of Ajodhya Prasad Tara Chand Khekra v. CIT [1967] 66 ITR 576. Thus, he directed the ITO to allow investment allowance. Against the same, the revenue has preferred this appeal. 2. The learned departmental representative submitted that the assessee has leased out the rice mill and received lease rent of Rs. 80,000. It has not worked the mill by itself and so the machinery has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of the assessee's business. Thus, in our view, the assessee is not entitled to investment allowance. 4. In New Savan Gur Refining Co. Ltd. v. CIT [1969] 74 ITR 7 (SC) the assessee leased out its factory. The question whether the income which arose to the assessee from the lease should be assessed under section 10 or under section 12 of the Indian Income-tax Act, 1922 and whether the assessee should be allowed development rebate came up for consideration before the Supreme Court. It was held therein that in terms of the lease deed the intention of the assessee was to part with the entire machinery of the factory and the premises with the obvious purpose of earning rental income and not to treat the factory and the machinery a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 202 (Punj. Har.) machinery was let out on hire to another company. The assessee claimed development rebate. On those facts, the Punjab and Haryana High Court held that the assessee was not entitled to development rebate on the machinery. In Punjab National Bank Ltd. v. CIT [1983] 141 ITR 886 the Delhi High Court held that plant and machinery can be said to be used by somebody else if some other person had control over the same and the word 'user' means not only getting benefit, but also controlling, running, stopping, repairing, replacing, etc. The ratio laid down in the above cases squarely apply to the instant case. The assessee had leased out the mill. The lessee who was running the mill had full control over the mill and the machiner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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