Investment allowance u/s 32A with respect to new plant & machinery in the business of a hotel.

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..... ness of a hotel. 2. Sub-Clause (iii) of Clause (b) of sub-section (2) of section 32A provides for investment allowance in respect of new machinery and plant installed after 31.3.1976 in any industrial undertaking for the purpose of business of construction, manufacture or production of an article or thing not specified in the list in the Eleventh Schedule. Sub-Clause (ii) of this an article or t .....

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..... ding restaurants do not qualify for investment allowance u/s 32A of the Income-tax Act. From the scheme of the Income-tax Act, 1961, it is clear that the business of running a hotel does not constitute an industrial undertaking. Wherever some relief has been provided to the business of hotel, it has been distinctly mentioned along with 'industrial undertaking' such as in section 80-J and 80HH. Thi .....

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..... Finance Act, 1968, the word 'processing' which is admittedly of wider connotation was also used along with 'manufacture' whereas this word has not been used in Section 32A. Thus, the scope of Section 32A of the Income-tax Act is narrower than that of Section 2(6) (d) of the Finance Act, 1968. 5. The business of a hotel, therefore, cannot qualify for investment allowance u/s 32A of the Income-tax .....

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