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TMI Blog2001 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), referred the following question of law as arising out of the orders dated April 11, 1989 and April 12, 1989, in I.T.A, Nos. 198 (CTK) of 1986 and 199 (CTK) of 1986, respectively: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the assessee is entitled to investment allowance under section 32A on data processing machine for the assessment years 1981-82 and 1982-83?" The opposite party is a small scale industrial unit as per the certificate granted by the Director of Industries, Orissa. It manufactures coal briquettes and lime as well as engaged in computer business. For the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agarwala has also relied on several other decisions as cited by him at page 1 of the paper book in support of this contention. However, the (?) did not make any investigation regarding computation of investment allowance. Therefore, we have asked the learned representative for the assessee, Sri A. Agarwala to file the working of investment allowance on data processing machine. He has also placed that on record. We have taken the statement of working of investment allowance on record. We are not required to compute the investment allowance and it is the duty of the Income-tax Officer. The investment allowance is allowable and computation of the same on data processing machine requires to be made by the Income-tax Officer. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion quoted hereunder lays down as follows: "In respect of...machinery...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 machinery...was installed or, if the...machinery...is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance equal to twenty five per cent. of the actual cost of the...machinery...to the assessee." Section 32A(2) reads as follows: "...machinery...referred to in sub-section (1) shall be the following, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Cloth and General Mills Co. Ltd., AIR 1963 SC 791, the Supreme Court has observed as follows: "The word 'manufacture' used as a verb is generally understood to mean as 'bringing into existence a new substance' and does not mean merely 'to produce some change in a substance', however minor in consequence the change may be. This distinction is well brought out in a passage thus quoted in permanent edition of Words and Phrases, Vol. 26, from an American judgment. The passage runs thus: 'Manufacture' implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more is necessary and there must be transformation; a new and different article must e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 17, the question that came up for consideration was whether the business carried on by the assessee in its computer division with the aid of computer system is an industrial undertaking which satisfies the conditions mentioned in section 32A(2)(b)(iii) of the Act. On consideration of a large number of cases, it held that the assessee was an industrial company engaged in the manufacture or processing of goods. "Data processing" means the converting of raw data to machine-readable form and its subsequent processing by a computer. "Computer" means one that computes; specifically a programmable electronic device that can store, retrieve and process data. Therefore, there cannot be any doubt that raw data cannot be equated with the result deri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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