9911796707
TMI Blog1994 (11) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... installed' in assessment year 1987-88, the assessee was not entitled to Investment Allowance under section 32A in respect thereto in that year. He, therefore, held the assessment as made by the Assessing Officer, erroneous and prejudicial to the interest of Revenue and accordingly modified the assessment by directing withdrawal of the Investment Allowance allowed by the Assessing Officer. Hence this appeal by the assessee. 2. The main contention of Mr. Moolchand Luhadia, partner, arguing the case himself for the assessee-firm was that since the machinery was purchased on 28-3-1987 and loaded on a hired trailor on 30-3-1987 for taking to assessee's place of business, it would be considered as 'installed' for the purposes of Investment Allowance under section 32A of the Act. This argument was supported with a large number of cases of the High Court & Supreme Court. The learned Departmental Representaitive, however, supported the order under appeal and further submitted that until and unless the machinery was brought to the place of business of the assessee in Rajasthan or elsewhere and placed in a position for use in assessee's business, the same cannot be considered to have been 'i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (c) ** ** ** (2A) to (7) ** ** ** (8) The Central Government, if it considers necessary or expedient so to do, may, by notification in the Official Gazette, direct that the deduction allowable under this section shall not be allowed in respect of any ship or aircraft acquired or any machinery or plant installed after such date as may be specified therein. (8A) ** ** ** (8B) Notwithstanding anything contained in sub-section (8) or the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. GSR 870(E), dated the 12th June, 1986, issued thereunder, the provisions of this section shall apply in respect of,-- (a) (i) ** ** ** (ii) any new machinery or plant installed after the 31st day of March, 1987 but before the 1st day of April, 1988, if the assessee furnishes evidence to the satisfaction of the Assessing Officer that before the 12th day of June, 1986, he had purchased such machinery or plant or had entered into a contract for the purchase of such machinery or plant with the manufacturer or owner of, or a dealer in, such machinery or plant, or had, where such machinery or plant has been manufactured in an undertaking owned by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Sri Rama Vilas Service (P.) Ltd. [1960] 38 ITR 25 (Mad.), Raju and Mannar v. CIT [1963] 50 ITR 202 (Mad.), CIT v. Saraspur Mills Ltd. [1959] 36 ITR 580 (Bom.) and the expression 'installed' does not necessarily mean that the item of plant or machinery should be embedded in earth or should be fixed in a particular position - CIT v. Vulcan Laval Ltd. [1991] 188 ITR 453 (Bom.) and purchase of machines like Vibrators, Hoist moving lifts etc., could be said to be 'installed' within the meaning of section 32A when these are ready for use. But the answer to the question as to whether a plant and machinery is to be treated as installed or an item of plant and machinery is to be considered as 'inducted' or 'introduced' in a given case shall have to be answered after taking into account not only the nature of such plant and machinery or an item thereof but also the nature of assessee's business. A mere acquisition of plant and machinery, which may be in a 'condition for service or use in the business of the assessee', would not amount to its 'installation' which means placing in a position for service or use'. Likewise the purchase of an item of plant and machinery would not amount to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying on its said business in the territories of Rajasthan and Gujarat States only. In the nature of assessee's business it required an excavating machine. The assessee accordingly placed an order on 24-3-1987 with TELCO at Jamshedpur for purchase of Tata Hitechi Model UH-083LC Bachoe for Rs. 24,03,500 and made advance payment of Rs. 2,00,000 also. To obtain the delivery of the machinery the assessee deputed its Supervisor Sri Padam Chand, who reached Jamshedpur on 26-3-1987. Sri Moolchand Luhadia, partner also followed him. The proposed machinery was got tested in the factory of TELCO at Jamshedpur, in the afternoon of 28-3-1987. It was found in a 'condition' of being used. As it was too late on that day and the following day was a holiday the gatepass for removal of the machinery from the factory could be obtained on 30-3-1987. A trailor from Coastal Roadways was arranged and the machinery was removed from the TELCO factory and loaded on the Trailor at 5 p.m. on 30-3-1987. The machinery was carried to Rawatpura village in the District of Banswara in Rajasthan State where it was put to use on 5-4-1987 in the construction of a tunnel at Narwali Distributory. The balance payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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