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TMI Blog1998 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... essors mounted on a lorry used for drilling borewells are entitled for special depreciation at 30 per cent. ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in granting the investment allowance under section 32A(2)(b) on the rigs and compressors ?" The assessee is a registered firm and the assessee carries on business in drilling borewells with the help of rigs and compressors mounted on a lorry. The assessee during the course of the assessment proceedings for the assessment year 1982-83 claimed depreciation at 30 per cent. on rigs and compressors on the ground that they constitute an integral part of the lorry. The assessee has also claimed investment allowance on rigs and compressors under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and compressors mounted on a lorry. So far as the second question of law that is referred to us is concerned, no doubt, this court in CIT v. Popular Borewell Service [1992] 194 ITR 12, held that the assessee would be entitled to investment allowance on the ground that drilling operation would result in the production of a thing and the thing produced being a borewell. In this view of the matter, this court held in the decision cited supra that the assessee would be entitled to investment allowance under section 32A of the Act. Mr. C. V. Rajan, learned counsel for the Revenue, submitted that the decision of this court in CIT v. Popular Borewell Service [1992] 194 ITR 12, is no longer good law in view of the decision of the Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance to new machinery employed in digging borewells. The Supreme Court held that the investment allowance was not admissible in respect of the new machinery employed in digging borewells. The Andhra Pradesh High Court in CIT v. Super Drillers [1996] 222 ITR 629, considered the case of an assessee which carried on the business of drilling borewells and held that the assessee was not an industrial undertaking engaged in manufacturing or producing articles or things and was not entitled to relief under sections 80J and 80HH/80HHA of the Income-tax Act, 1961. The Andhra Pradesh High Court noticed the decision of the Supreme Court in CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412 and held that the business of drilling borewells cannot be r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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