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TMI Blog2006 (11) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the case papers, relevant to be taken into consideration are: The assessee, namely, M/s. Biyar Rubbers (P.) Ltd., is an industrial unit having its production unit at Peenya Industrial Estate, Bangalore. The assessee was originally assessed and the assessment was completed on March 28, 1988, under section 143(3) of the Act determining the income at Rs. 5,42,660 as against the loss returned at Rs. 8,02,919. It was assailed by the assessee before the Commissioner of Income-tax (Appeals) who set aside the assessment on March 10, 1989, and directed the reassessment after giving opportunity to the assessee to substantiate its claim regarding depreciation and investment allowance claimed by it. The assessee had claimed depreciation and inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that the Assessing Officer had appreciated the evidence in the correct perspective and recorded a right finding that the electrical energy was actually made available only in the month of September 1985 and no such electrical energy was available prior to March 31, 1985, and thus the machine was not put in use. Finally, the Commissioner of Income-tax (Appeals) concluded that the machine could not be held to have been "installed" by March 31, 1985. Consequently, the claim of the assessee regarding investment allowance for the relevant assessment period ending March 31, 1985, was negated and the order of the Assessing Officer was confirmed. Not satisfied with the said finding the assessee was in appeal before the Income-tax Appellate T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neering. The other components of machinery like electrical power cable, switch gears and other heavier items of electrical, were also acquired subsequently. It also recorded that electrical energy was supplied only on March 11, 1985, but the assessee had tampered with the said documents falsifying the relevant date September 11, 1985, as March 11, 1985. It also noted that civil work like roof of the building was also not laid during the relevant assessment year but it was only laid in the month of March 1985. Considering all these circumstances the Income-tax Appellate Tribunal held that the machinery could not have been put in a position to be ready for use by the end of March 1985 and hence the assessee was not entitled to investment allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction plant would be entitled to investment allowance on proof that during the relevant assessment year the plant had become functional, complete in all respects. We have considered the grounds so urged and bestowed our concern to the following case law relied by both sides. Per assessee, In the case of Tata Iron and Steel Co. Ltd. v. Collector of Central Excise reported in [2005] 4 RC 592; [2005] 3 SCC 528, the apex court at paragraphs 13 and 14 held thus: "The meaning of the word 'installed' as given in Webster's New International English Dictionary is 'to set up or fix in position for use or service as to install a heating or lighting system'. The Shorter Oxford Dictionary in English gives as one of the meanings 'to place an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an engine was fixed in a vehicle it was installed within the meaning of the expression in clauses (vi) and (via) of section 10(2). That, therefore, the assessee was entitled to deduction of the extra depreciation allowances under the second paragraph of clause (vi) and clause (via) of section 10(2)." In the light of the above exposition of the word "installed" by the apex court, it will be gainful to refer to the relevant provisions of section 32A itself, which reads thus: "32A. Investment allowance.-(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 32A of the Act. The words used in the section "first put to use" in the immediate preceding year would indicate that not only putting in place of the machinery or plant but it should be capable of production and should have been put to use. In the instant case, it is noticed that the machine "Alfred Herbert Intermix Machine" was one of the machines required forming part of the plant for production of the product, which was to be produced by the assessee. The machine by itself was not capable of such production. Other machines were required to complete the plant. Thus, merely installing of "Alfred Herbert Intermix Machine", was not sufficient as the" plant" would not have become functional ready to yield the product. A distinc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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