9911796707
TMI Blog2012 (6) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... -2011 - RAO V. V. S., RAO NALLA B. N., JJ. JUDGMENT V. V. S. Rao J.- 1. In this referred case the following two questions have been referred for the opinion of this court by the Income-tax Appellate Tri- bunal, under section 256(1) of the Income-tax Act, 1961 (the Act). "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee, who undertook job work, was entitled to investment allow- ance under section 32A of the Income-tax Act ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the assessee, who undertook job work by rendering services to others inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of manufacture or production and the claim for job works cannot be allowed. Section 32A(1) of the Act with its two provisos and the Explanation as well as sub-section (2) read as under : "32A. Investment allowance.-(1) In respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) shall be the following, namely : (a) a new ship or new aircraft acquired after the 31st day of March, 1976, by an assessee engaged in the business of operation of ships or aircraft ; (b) any new machinery or plant installed after the 31st day of March, 1976,- (i) for the purposes of business of generation or distribution of electricity or any other form of power ; or (ii) in a small-scale industrial undertaking for the purposes of business of manufacture or production of any article or thing ; or (iii) in any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment rebate is allowable under section 33 of the Act, and any machinery or plant, the whole of the actual cost of which is allowed as a deduction in computing the income chargeable under the head "Profits and gains of business or profession" of any one previous year. Though sub-section (1) of section 32A of the Act contemplates that the investment allowance in respect of the machinery or plant owned by an assessee wholly used for the purpose of business, it is subject to sub- section (2). In so far as a small scale industrial undertaking is concerned, machinery or plant ought to have been used for the purpose of business or manufacture or production. The same is the case with any other industrial undertaking. If the legislation intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : In Black s Law Dictionary, the meaning given to the word manu- facture is the process or operation of making wares or any material produced by hand, by machinery or by other agency ; anything made from raw materials by the hand, by machinery or by art. It also states that the production of articles for use from raw or prepared materials by giving such materials new forms, qualities, properties or combinations, whether by hand labour or machine, would be manufacture . When the assessee subjects grey cloth to the process of dyeing and printing, it makes or produces distinct article having a distinct use as distinguished from the grey cloth though grey cloth is still subsisting. As a result of the process to which grey cloth is subj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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