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TMI Blog1992 (2) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case the learned CIT(A) erred in holding that construction work is also an activity of production and, therefore, it is an Industrial Undertaking within the meaning of Section 32A of the IT Act and, therefore, entitled to investment allowance. The learned Sr. Departmental Representative referred to the decision of the Hon'ble Bombay High Court in the case of Shah Construction Co. Ltd. v. CIT [1991] 188 ITR 537 (Bom.) where it has been held that construction of wells, roads, dams, canals etc. did not amount to production or manufacturing of articles or things and hence that assessee was not entitled to benefit of investment allowance. He submitted that similar views were expressed by their Lordships in the case of CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 32A. We find that section 32A(2)(b), which prescribes the categories of assessees who would be entitled to investment allowance, contains three sub-clauses. Sub-clause (i) mentions those assessees who are engaged in the business of generation or distribution of electricity or any other form of power and in all those cases the benefit of investment allowance is available. That matter is not in dispute before us. However, sub-clauses (ii) and (iii) of section 32A(2)(b) prescribe those other categories of assessees who instal plant and machinery and would be entitled to this benefit. They are relevant for our purpose and they read as under : " (ii) in a small-scale industrial undertaking for the purposes of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the Eleventh Schedule. The inferences which emerge and which are relevant for us are that whereas a small-scale industrial undertaking is entitled to benefit of investment allowance only if it carries on the business of manufacture or production of any article or thing, any other industrial undertaking is entitled to this benefit even if it carries on the business of construction. Even if we accept the arguments of the learned counsel for the assessee that the article or thing includes a building also, it would mean that an assessee who is engaged in the business of construction of a building or a godown would be entitled to the benefit of investment allowance only if it is " any other " industrial undertaking and not a small-scale ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced. We agree with the submissions of the learned Departmental Representative that since the words ' manufacture ', ' production ' and ' construction ' have not been defined in the Income-tax Act, they have to be understood in their ordinary sense and hence it can only be said that the building or a godown is constructed and not manufactured or produced. Of course, if the assessee had been an industrial undertaking other than a small-scale industrial undertaking, it could have been entitled to the benefit of the investment allowance in respect of machinery or plant installed for the purposes of business of construction of godowns or the buildings, because then it should have been covered by the provisions of sub-clause (iii) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase law mentioned above, the situation which may emerge is that the assessee before us which is engaged in construction activity, may be treated as an industrial undertaking, and in order to get the benefit of investment allowance may not be required to carry on manufacturing or production work --- as held in the case of Shantilal Ishverbhai Patel. Nevertheless, one important requirement would be missing and that is, being a small-scale industrial undertaking, it would not be falling under the provisions of section 32A(2)(b)(iii), but would be falling under provisions of section 32A(2)(b)(ii). As such, the construction business only, carried on by it, will not entitle it to the benefit of investment allowance, because under section 32A(2)(b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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