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TMI Blog2007 (1) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... ly a means for transporting the timber etc. of a third party from one place to another and consequentially not entitled to investment allowance under section 32A of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that ropeways were road transport vehicles as contemplated by proviso (b) to section 32A(1) and, therefore, not entitled to investment allowance?" At the time of hearing of the petition, the petitioner sought to redraft the questions of law in the following manner: "1. Whether under the facts and circumstances of the case the Tribunal was justified in upholding that the assembly of component is not manufacturing/industrial activity and hence not allowi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also from transport business carried on by installing the ropeways during the year in question. The assessee entered into a contract with M/s. Babu Ram and Sons on September 12, 1979 whereby she agreed to put up a ropeway in forest Gawas, UP 54 and 55, Kheshdhar Range of Rohroo Forest Division for the purpose of transportation of B. L. Timber Billets of all sizes belonging to M/s Babu Ram and Sons on contract basis on the terms and conditions agreed therein. For the purpose of putting up these ropeways, the assessee purchased various materials consisting of wire ropes, driving units (i.e., engines, differentials, gearboxes, brakes etc.), lasso pulleys and hangers, rope hooks, tools and accessories. On this total investment the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, as existed at the relevant time are extracted below: "32A.(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, then, in respect of that previous year, of a sum by way of investment allowance equal to twentyfive per cent. of the actual cost of the ship, aircraft, mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Eleventh Schedule." A perusal of the provisions of section 32A of the Act shows that 25 per cent. of the actual cost of ship, aircraft, machinery or plant to the assessee is allowable as deduction by way of investment allowance. It further provides that in the case of new machinery or plant installed after March 31, 1976, the same should be in a small scale industrial unit for the purpose of business of manufacture or production of any article or thing. The contentions raised by counsel for the assessee are that it is not disputed that the assessee is a small scale industrial unit. She purchased machinery, which was used for the purpose of business. The ropeways which were installed with that machinery incidentally resulted in transp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business and the same does not entitle the assessee to the benefit of investment allowance under section 32A of the Act. To the contention of counsel for the assessee that the findings recorded by the Tribunal are perverse, it was submitted that there is no material on record to take a view different to what has been taken by the Tribunal. Having heard learned counsel for the parties, we find from the material on record that the assessee had sought to claim the benefit under section 32A of the Act on the investment made on the value of plant and machinery installed for transport purposes and not for the purpose of manufacture or production of any article or thing. There is no material on record to even remotely suggest that the machinery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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