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TMI Blog1983 (10) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. 4. The ITO did not allow the aforesaid claims of the assessee on the ground that the provisions of s. 40A(5) of the Act and Expln. 2(b) thereto were applicable and therefore, he rejected the claim of the assessee for medical reimbursement and personal accident insurance premium paid by the assessee to its Chief Executive and investment allowance under s. 32A of the Act is not allowable in view of the fact that the business of the assessee is leasing out of assets and this allowance is admissible in respect of machinery or plant which is owned and used by the assessee wholly for the purposes of business carried on by it. 5. In appeal, the CIT (A) deleted Rs. 4,760 being medical reimbursement on following the decision of the Madras High Court in CIT vs. Manjushree Plantations Ltd. (1979) 13 CTR (Mad) 10 : (1980) 125 ITR 150 (Mad) as also Rs. 541 being personal accident insurance premium on following the decision of the Delhi High Court in CIT vs. Lala Shri Dhar (1972) 84 ITR 192 (Del). Similarly he held that the claim for investment allowance of Rs. 6,36,530 is allowable in view of the decision of this Tribunal in assessee s own case for asst. yr. 1978-79 in ITA No. 1069 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit, amenity or perquisite" may take benefits in kind and in service and may take into also cash, that if undue emphasis is given to the words "whether convertible into money or not" and a restricted meaning is assigned to the "term benefit, amenity or perquisite" that would mean that any cash allowance paid by the employer to an employee of any sum what so ever will be entitled to deduction despite s. 40(a) (v), that such a construction is irrational defeating the very purpose of s. 40(a) (v). Thus from the ratio laid down by this decision it is more manifest that the provisions of s. 40A(5) are applicable to the amounts of medical reimbursement and insurance premium to Chief Executive. Their lordships of Kerala High Court in deciding this case did not follow the decision of the Hon ble Madras High Court case in (1979) 13 CTR (Mad) 10 : (1980) 125 ITR 150 (Mad) but they relied upon the case in CIT vs. G. Venkataraman (1978) 111 ITR 444 (Mad) as they have nowhere mentioned in deciding the case that they also dissent from the decision in (1978) 111 ITR 44 (Mad). 7. This issue was there before the Madras Bench B of the Tribunal in ITA No. 1385 (Mds) 82, where the Tribunal held i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cified in the list in the Eleventh Schedule............." 9. Sec. 32A(2B)(iii) is inserted by Finance (No. 2) Act, 1977 w.e.f. 1st April, 1978. In the case of the assessee the previous year ended on 30th Nov., 1978. Thus the provisions as stated above of s. 32A(2B(iii) are applicable to the facts and circumstances of this case. From a mere reading of the provisions quoted above of s. 32A of the Act it is more than manifest that investment allowance is to be allowed to the assessee who fulfills the conditions laid down therein. Therefore, the investment allowance is to be allowed to the assessee, if the assessee fulfills the conditions and is the owner of the plant and machinery and manufactures or produces goods and articles. Thus for the allowance under 32A the assessee must prove itself to be an industrial undertaking, having ownership in the plant and machinery vide which it produces or manufactures goods and articles. Therefore, we have to see for investment allowance that where an assessee is the owner of the plant and machinery and of raw material used in the manufacture or producing the articles or goods and should also deal in such articles. Therefore, if an assessee main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decided that the assessee is not the owner of the plant and machinery. For the purpose of any investment allowance the assessee should be both de jure and de facto owner of the machinery and plant. Thus, from following these two decisions we hold that the assessee is not entitled to the investment allowance. Further more, Madras Bench B of the Tribunal in ITA No. 491 (Mds) 82 dt. 17th Dec., 1982 in the case of A. G. S. Timber Chemical (Industrial) P. Ltd., where Sri A. Krishnamurthy, Judicial Member spoke for the Bench held that if plant and machinery is taken on lease by an assessee, then the assessee is not an industrial undertaking entitled to relief under 80J as the activities of manufacturing carried out by such an assessee could not amount to an industrial undertaking as required for relief under s. 80J as the That assessee should be an industrial undertaking and the same is, if it is the owner of the undertaking including all the assets. Thus the Tribunal did not allow s. 80J relief to the assessee, who was found to be a lessee of the plant and machinery which were used for manufacturing and production of goods. In our opinion the ratio of this decision is that if an i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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