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TMI Blog2002 (9) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... rocessing division? - Whether Tribunal having held that computers are not office appliances erred in law in not considering the data processing division as a separate industrial undertaking eligible for deduction u/s 32A?" – These two questions are answered in favour of the assessee and against the Revenue - - - - - Dated:- 16-9-2002 - Judge(s) : R. JAYASIMHA BABU., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by K. RAVIRAJA PANDIAN J.-The question referred at the instance of the Revenue is; "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the expenditure of Rs. 5,25,000 estimated by the Assessing Officer during the accounting year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e" are two different expressions. "Repair" means "to mend, remedy, restore, renovate, to restore to a sound or good state after decay, injury, dilapidation, or partial destruction". Thus, "repair" presupposes certain injury or partial destruction. Whereas "maintenance" would mean to keep a particular thing in its similar state and require no mending, renovation or restoration. Hence, the view of the Revenue that expenses incurred in running and maintenance of motor car as stated under section 37(3B) would not necessarily include repair and replacement. The abovesaid view of ours is fortified by the view taken by the Gauhati High Court in the decision of George Williamson (Assam) Ltd. v. CIT [1997] 223 ITR 203, wherein the court held as foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing three questions have been referred at the instance of the assessee: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the expenditure of Rs. 26,729 actually incurred and for which liability to pay has arisen in the accounting year can be disallowed as not an admissible deduction in computing the income from business? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in negativing the claim for the investment allowance under section 32A of the Income-tax Act, 1961, in respect of computers installed in its data processing division? 3. Whether, on the facts and in the circumstances of the case, the Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been actually incurred for which liability to pay has arisen in that accounting year. There is no dispute in this case that the amount has been actually paid. In the statement of case also, it is stated that the assessee-company in its accounts treated the abovesaid amount as prepaid and showed it as an asset in its balance-sheet. However, the payments were made in pursuance of demands raised by the postal, telephone and telegraph departments, etc., and claimed as deduction in computing the income from business. The expenditure actually incurred and revenue in nature relating to the business is allowable. Any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also ended against the assessee. The question identical to the one which is under consideration has been considered by this court in the case of CIT v. Camp-Help Services (P.) Ltd. [2000] 246 ITR 722 has held thus: "When data is processed with the aid of computers and the processing involves complicated steps which can only be performed with speed in a computer and the end-product is the analysis and presentation of data in the desired format such as a balance-sheet, there is prodl1ction. The word 'production' in section 32A(2), therefore, comprehends processing activity and the word 'article' in that provision includes movables. The balance-sheet, sales analysis, statements, etc., obtained as a result of processing are movables and a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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