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TMI Blog1998 (8) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... to these three assessment years. 4. The first common ground of appeal pertains to the allowability of deduction under s. 32AB of the IT Act, 1961, in respect of investment deposits as claimed by the assessee bank in relevant assessment years. 5. The assessee bank has claimed deduction under s. 32AB i.e., on account of investment deposit in respect of these three assessment years: Asst. yr. Claim under s. 32AB Rs. 1988-89 1,61,24,000 1989-90 2,47,60,000 1990-91 3,78,36,034 In support of the claim, the assessee had also filed tax audit report in Form No. 3AA of the IT Rules along with return of income. In all these three assessment years under consideration the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Auditors appointed by the Reserve Bank of India in their reports in Form No. 3AA under s. 32AB(5) for all these years concerned. (4) The assessee bank was not covered by the excluded category of business specified in s. 32AB(2). (5) The learned CIT(A) had not shown any valid, cogent or tenable ground for upholding such rejection. (6) The learned CIT(A) s order suffers from lack of application of mind to the submissions made before the AO and himself, which have been similarly rejected without passing a speaking order thereon. (7) If sustained, the rejection of the assessee s claim, would defeat the very object of enacting the provisions of s. 32AB brought on the statute book to provide alternative relief to deduction under s. 32A in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al point to resolve the issue under consideration is to understand clearly the phrase eligible business or profession;. Sub-s. (2) of s. 32AB reads as follows: (i) Eligible business or profession shall mean business or profession, other than: (a) the business of construction, manufacture or production of articles or thing, specified in the list of Eleventh Schedule carried on by an industrial undertaking, which is not a small scale undertaking as defined in s. 80HHA; (b) the business of leasing or hiring of machinery or plant to an industrial undertaking, other than a small scale industrial undertaking other than as defined in s. 80HHA, engaged in the business of construction, manufacture or production of any article or thing specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Eleventh Schedule to the IT Act. In other words, the deduction is admissible to all the assessees, who carry on eligible business or profession which as per s. 32AB(2) means business or profession other than the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule (in case it not a small scale industrial undertaking) and the business of leasing or hiring of machinery or plant to an industrial undertaking other than a small scale industrial undertaking engaged in the business of low priority items as specified in the list in the Eleventh Schedule. It may be clarified that the business of construction is an eligible business for the purposes of this profession." 10. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order for asst. yr. 1985-86, treated the same as non-business expenditure and disallowed the same. On appeal, by the assessee, the learned CIT(A) had also confirmed the order of the AO, following the earlier year s orders. Now the assessee is in appeal before us. 14. During the course of hearing, the learned counsel for the assessee brought to our notice that the point at issue is covered in favour of the assessee by the decision of Hon ble Gujarat High Court in the case of Gujarat State Export Corporation Ltd. vs. CIT (1996) 131 CTR (Guj) 23 : (1994) 209 ITR 649 (Guj). Respectfully following the decision of the Jurisdictional High Court mentioned above, we are inclined to allow the claim of the assessee in respect of club ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to admissible depreciation, we claimed under s. 32AB and consequential effect of claim under s. 36(1)(viia). As soon as it was found that the assessee had to pay an additional amount of tax consequent upon the revised return by way of total income promptly it paid the tax of Rs. 2,10,000 under s. 140A voluntarily. It was contended that the error in computation was bona fide due to calculation error made by the auditors. Our attention was also drawn by the learned counsel for the assessee to s. 140A(2) of the Act. The learned counsel strongly contended that the credit should not have been denied to the extent of Rs. 2,10,000. The learned Departmental Representative vehemently supported the order of the learned CIT(A) and contended that no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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