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TMI Blog1993 (7) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness profit. According to the Assessing Officer, the assessee was entitled to relief under section 32AB on these machineries. It was also found that the assessee had sent an advance of Rs. 39,057 to National Small Enterprises for purchase of certain machinery but no machinery was received in the year. According to the assessee, this amount was utilised for sending an advance for purchase of the machinery and as such, the same would qualify for deduction under section 32AB. According to the Assessing Officer, however, the use of the word ' utilised ' pre-supposes the acquisition of the asset itself. As the machinery in question was not delivered within the year, no deduction under section 32AB was found allowable to the extent of Rs. 39,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only the amount should be paid for purchase of a certain machinery but the machinery itself should be received within the year concerned. It was submitted that whether the purchase is completed at later point of time or within the accounting period itself is not very relevant. The fact remains that the money is kept apart and is utilised for purchasing the machine within the time. 5. The Departmental Representative, however, relied upon the order of the CIT(A). 6. We have heard both the parties. Section 32AB relating to investment deposit account has been inserted by the Finance Act, 1986 with effect from 1-4-1987. The introduction of this section was made with a view to do away with the distinction between the small and large compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... those assessees who choose to make a deposit with the development bank. We cannot see as to how this benefit would not be allowed to an assessee who sends an advance for purchase of a new machinery though the same is not acquired and installed during the previous accounting period. As discussed by the CBDT in their circular dated 9-7-1986, this enactment has been provided with a view to encourage all the assessees to make investment decisions not only on tax consideration but on other consideration as well. 7. The Institution of the Chartered Accountants vide their guidance note on audit under section 32AB of the Income-tax Act, in para 6.6, has opined that it was not necessary that the specified machinery should be installed or put to us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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