2005 (3) TMI 77

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..... not falling under the second proviso to section 32A of the Act is entitled for investment allowance. The words "business of manufacture" or "production" are very wide terms and would encompass the whole set of machinery and plant which is used for the purpose of manufacture of any article or thing. Thus, the generator which is used in the business of manufacture or production of any article or thi .....

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..... to income-tax in the status of a registered firm. It is engaged in the business of manufacturing and sale of surgical and plastic products. It has installed a generator costing Rs. 96,955 and claimed investment allowance. The Assessing Officer disallowed the investment allowance on the generator on the ground that it is not a machinery for the purpose of manufacturing, etc. as it is only used for .....

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..... s not admissible. The submission is misconceived. Section 32A of the Act provides investment allowance which has been enacted by Parliament to encourage the industrialisation of our country. Sub-section (1) of section 32A of the Act provides for allowing investment allowance equal to twenty-five per cent, of the actual cost of the ship, aircraft, machinery or plant of the assessee. However, the se .....

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..... p or aircraft or machinery or plant referred to in sub section (1) shall be the following, namely: ... (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 .....

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..... hing. Thus, the generator which is used in the business of manufacture or production of any article or thing by the assessee clearly falls within the aforesaid clause and the Tribunal has rightly upheld the allowance of the investment allowance. In view of the foregoing discussions, we answer the question referred to us in the negative, i.e., in favour of the assessee and against the Revenue. Ho .....

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