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TMI Blog2001 (9) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,58,308 and claimed investment allowance at 25 per cent. of the said cost. The said machinery includes data processing machine, the cost of which is Rs. 2,65,620. The Assessing Officer while framing the assessment excluded the said item, i.e., data processing machine, on the ground that the same is an office appliance and therefore, the assessee is not entitled for investment allowance. This was contested by the assessee before the Commissioner (Appeals). The Commissioner (Appeals) allowed the claim of the assessee, placing reliance upon the judgments of the Bombay High Court in CIT v. I. B. M. World Trade Corporation [1981] 130 ITR 739 and CIT v. International Computers Ltd. [1981] 131 ITR 1. According to the finding of the Commissioner (Appeals) in view of the above decisions, the data processing machine would not be considered an office appliance and therefore, the assessee is entitled for investment allowance. This was contested by the Department in appeal before the Income-tax Appellate Tribunal (for short, "the Tribunal"). Though the Tribunal negatived the contention of the Department that the said data processing machine has to be considered as an office appliance in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e data processing machine could not be considered as an office appliance, as per the findings of the Commissioner (Appeals) and the Tribunal, but, however, the authorities have not considered the compliance with the other requirements in order to get the benefit of investment allowance. In the absence of any such finding, the assessee is not entitled for the benefit of investment allowance. Therefore, the denial is proper and just. Before considering the rival contentions of the parties, it would be appropriate to refer to the relevant provisions of the Act. "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 twenty-five per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond proviso, the assessee is not entitled for investment allowance in respect of any plant and machinery installed in any office or residential accommodation or any office appliance or a road transport vehicle. Under sub-section (2), the requirement is that the plant and machinery should be installed after March 31, 1976, in respect of a small-scale industrial undertaking for the purpose of the business of manufacture or production of any article or thing; while in the case of any other industrial undertaking for the purpose of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule. Therefore, what is relevant for the purpose of getting the benefit of investment allowance is that the plant or machinery should have been installed after March 31, 1976, and it should be used by the industrial undertaking other than a small-scale industrial undertaking for the purpose of manufacture or production of any article or thing other than those specified in the Eleventh Schedule. If we examine the case of the assessee in the light of the above provisions, though the Assessing Officer negatived t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The installation and operation of the machines is on a scientific basis and even for the purposes of installation certain special conditions have to be provided in the form of air-conditioning or a particular temperature. The purposes for which such machines which can be described as computers are used are well known and in highly scientifically developed systems, they have their own roles to play and they can not be equated, therefore, with office appliances which would be of a much simpler nature. They are really substitutes for human labour not in the sense of manual labour but in the sense they perform intellectual functions which would normally be performed by highly qualified engineers. One machine by itself serves no purpose, but what has to be used is a group of machines which make up a 'system'. The basic function of a computer are : (i) input ; (ii) storage ; (iii) control ; (iv) processing ; and (v) out put. The processor has to translate the language of the programmer into the computer-code form, which is used internally by the computer. A computer system or an electronic data processing system is physically a collection of electromechanical and electronic components ..... 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