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TMI Blog1984 (2) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... red in directing the ITO to allow deduction of Rs. 23,795 on account of investment allowance in respect of the above machinery, and (iii) that on the facts and in the circumstances of the case the Commissioner (Appeals) erred in directing the ITO to allow depreciation on motor cars. 2. The assessee had claimed investment allowance of Rs. 23,795 in the profit and loss account submitted with the revised return. The aforesaid claim was made by the assessee in respect of rolling mill machinery manufactured by the assessee for its use. The machinery was manufactured by the firm from secondhand parts purchased from the market. The assessee when required to justify the claim, pointed out to the ITO by its letter dated 20-1-1981 that the investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... word ' new ' may have different meanings, but, when used with reference to a machine, its meaning is ' new made or brought into existence for the first time ' which is one of the meanings given in the Shorter Oxford Dictionary. One does not discover the meaning of the word ' new ' by trying to find out what is meant by the word ' old '. Nor is it of any assistance to say that the word is relative. ' New ' as used in these provisions cannot mean ' new to the assessee '. The word ' new ' in this context must mean not existing before ; now made or brought into existence for the first time ' in contradistinction and antithesis to the word used '." On the basis of the aforesaid observations of the author the learned counsel for the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that it is a new machine entitled for a claim of investment allowance under section 32A. He, therefore, supported the order of the ITO. 6. The learned counsel for the assessee, on the other hand, supporting the order of the Commissioner (Appeals) contended before us that the materials required for manufacturing rolling mill machine are (a) steel plate for rolling mill body and other accessories ; (b) steel forging for pedestal bearing boxes and gears ; (c) steel rods for screw and tai rods ; (d) axle for rolling mill shaft ; (e) fly wheel for rolling drive ; and (f) steel rolls for hot rolling mills and chilled rolls for cold rolling. After an elaborate manufacturing process with a help of gas, welding rods, carbide, tools, rough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book Income-Tax Law, Second edition, Vol. 1, at page 612 have observed that ' new ' as used in this provision cannot mean ' new to the assessee '. The word ' new ' in this context must mean ' not existing before, now made or brought into existence for the first time ' in contradistinction and antithesis to the word ' used '. If we understand the ratio laid down by the Supreme Court in its proper perspective, the assessee is entitled to claim investment allowance in respect of the machinery which was not existing before and which is brought into existence for the first time. If we apply the ratio laid down by the Supreme Court to the facts of this case, the rolling mill machine in respect of which the investment allowance is claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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