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TMI Blog2010 (7) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... 981-82:- In R.A. No. 46 "2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing depreciation to the assessee by treating it to be an industrial undertaking?" "3. Whether on the facts and the circumstances of the case, the Appellate Tribunal was right in law in allowing depreciation on foreign cars in view of the provisions of section 32(1)(ii)?" In R.A. No. 47 "2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in allowing depreciation on all vehicles at foreign sites?" "5. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law holding the construction business as industrial undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view to curbing ostentatious expenditure on imported cars. This could, however, apply only to the cars which were imported to be used within the country. In such situation, there could be no ambiguity about the provisions of the aforesaid proviso. The assessee's case, however, falls in a different category. If the aforesaid provision is liberally interpreted, then of course depreciation could not be allowed to the assessee in respect of the motor cars manufactured abroad. But on the facts of the present case, this could lead to anomalous results. The assessee would per force be compelled to take cars of Indian make abroad, involving prohibitive cost of transportation etc. with a view to claiming depreciation allowance. In fact, to a pruden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns referred. Re. Que.3 in R.A. No.46 & Que.2 in R.A. No.47:- 6. Learned counsel for the assessee reiterates his submissions made before the CIT(A) that literal construction of the second proviso to Section 32(1)(ii) of the Act will lead to absurdity and should be avoided, as held by the Hon'ble Supreme Court in Mahadeo Prasad Bais v. ITO [1991] 4 SCC 560. 7. The provision was incorporated by the Finance Act, 1975 and the speech of the Finance Minister while pressing the Bill, as reported in 98 ITR Statute 113 at page 116, is as under:- "With a view to curtailing obstentatious expenditure in business and professions, I propose to deny depreciation in respect of imported cars which was acquired after 28.2.1975. Simultaneously, I propose t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Re. Que.2 in R.A. No.46 & Que.5 in R.A. No.47:- 11. Claim under Section 80J of the Act is admissible if the profit is earned from a newly established eligible industrial undertaking. The term 'industrial undertaking' has been defined under Section 80-I of the Act. The relevant conditions therein are specified in Section 80-I(2)(iii) of the Act i.e. an undertaking engaged in manufacture or production of articles or things. The activity of the assessee, as already mentioned above, is construction and fabrication of mechanized houses, which cannot be equated to manufacture and production of articles or things. Reference may be made to judgment of the Hon'ble Supreme Court in CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412/70 Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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