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TMI Blog1995 (1) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... cessories Stores v. Union of India [1991] 189 ITR 70. Respectfully following the same, the issue is decided in favour of the assessee and the matter is restored to the file of the AO for verifying the payments made. He is directed to allow the claim of the assessee provided the payment of sales tax had been made within the due dates as per the provisions of section 43B. 3. The next common issue relates to the investment allowance in respect of machineries installed for the purpose of manufacturing of grape juice. Assessee is a company engaged in the manufacture of grape juice and wine. Grape juice is an intermediary product which is used as a raw material for the manufacture of wine. The machineries required in the manufacture of grape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. On the other hand, the learned Departmental Representative, submitted that sub-section (2) of section 32A, provides a condition that if the purpose of the industrial undertaking is to manufacture any of the items specified in Eleventh Schedule, then no investment allowance can be allowed to the assessee. Since the purpose of the industrial undertaking is to manufacture wine, the AO was right in refusing the claim of the assessee. According to him the words "for the purpose of manufacturing" refers to the industrial undertaking and not to the machinery. 7. Before we consider the relevant provisions pertaining to investment allowance, it is pertinent to note that section 32A is a beneficial provision and, therefore, should be constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sub-section (1) provides that the investment allowance equal to twenty-five per cent of the actual cost of the machinery or plant shall be allowed to the assessee in respect of the plant or machinery specified in sub-section (2) which is owned and wholly used for the purpose of business carried on by the assessee. Sub-section (2) specifies the plant or machinery in respect of which the investment allowance can be allowed. Sub-clause (a) of sub-section (2) of section 32A is not relevant for our consideration. Sub-clause (b) of sub-section (2) of section 32A with which we are concerned is reproduced hereunder: "2(b) any new machinery or plant installed after the 31st day of March, 1976, (i) for the purpose of business of generation or d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But we are unable to accept the same. In our view, the words "for the purpose of business of construction, manufacture or production of any article or thing" used in sub-clause (ii) and sub-clause (iii) of sub-section (2)(b) of section 32A refers to the plant and machinery installed by the assessee and not to the industrial undertaking of the assessee. The words "new plant or machinery installed" in sub-section (2)(b) of section 32A are qualified by two requirements, viz., (i) that the machinery or plant must be installed in an industrial undertaking and (ii) that such machinery or plant must be installed for the purpose of business of construction, manufacture or production of any article or thing. Therefore, the prohibition provided with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inasmuch as such provision has been enacted as a beneficial provision and, therefore, we must adopt the interpretation which advances the object of the Legislature rather than the interpretation which defeat it. If so construed, then assessee cannot be denied the investment allowance merely because the ultimate product manufactured by the assessee is specified in Eleventh Schedule, particularly when the machineries installed by assessee are identifiable and used exclusively for manufacture of grape juice which is not specified in Eleventh Schedule. On similar facts, the Tribunal has also taken the same view in the case of Ugar Sugar Works Ltd. In our view all the requirements prescribed in sub-section 2(b) of section 32A are fulfilled in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry much clear that the words "for the purpose of business" have been used by the Legislature with reference to plant and machinery installed and not with reference to the object of the industrial undertaking. Therefore, the contention of the revenue is without force. 11. It may also be mentioned that there is well settled rule of interpretation that even two views are possible while interpreting a fiscal statute, then the interpretation which favours the subject must be adopted. This rule has been accepted by the Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192. In view of this ruling, the contention of the assessee deserves to be accepted. With these observations, the issue is decided in favour of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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