9911796707
TMI Blog1999 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Reference No. 5 of 1987 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the claim of the investment allowance of the assessee under section 32A of the Income-tax Act, 1961, and in that view was correct in modifying the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act, 1961, for allowing the claim ?" The common question in the assessment years 1978-79 to 1981-82 and 1983-84 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee fulfilled the conditions laid down in section 32A of the Income-tax Act, 1961, and in that view upholding the order of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d machinery, which it used, for the purpose of manufacture of articles or things. The case of the assessee is that erection of boilers is amounting to manufacturing of boilers. Therefore, the plant and machinery which the assessee has used for erection of the boiler is entitled for investment allowance on that machinery under section 32A of the Act. The investment allowance was allowed by the Income-tax Officer. Thereafter, the Commissioner of Income-tax on perusal of the assessment record of the assessee for the assessment years 1978-79 and 1979-80 found that though the assessee is erecting the boiler, but there is no manufacturing activity. He issued show-cause notice why that investment allowance should not be withdrawn. After consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, learned counsel for the assessee, Dr. Pal, submits that a holding company which manufactures the parts of the boiler simply supplying parts of the boiler at the site and thereafter the sub-contract has been given to the assessee for erection of the boiler in a factory. The assembling of parts is as good as manufacturing. He placed reliance on Narne Tulaman Manufacturers Pvt. Ltd. v. Collector of Central Excise [1990] 183 ITR 577 (SC). He further submits that even any machinery or parts thereof, including the boiler if embedded in the earth, that does not lose its movable character. For that, he placed reliance on the decision of the Supreme Court in Sirpur Paper Mills Ltd. v. Collector of Central Excise, AIR 1998 SC 1489. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and welding generator and that the boiler also can be shifted by dismantling and that can be erected in some other place. Therefore, it is a movable article. Therefore, merely because it is imbedded in the earth, it does not lose its character of movable article. For that Dr. Pal places reliance on the decision of the Supreme Court in Sirpur Paper Mills Ltd. v. Collector of Central Excise, AIR 1998 SC 1489. In paragraph 4, their Lordships observed that, if the appellant wanted to sell the paper making machine, it can be shifted from one place to another, when it can be shifted, it cannot be treated as immovable property. Dr. Pal submits that when the machine installed and imbedded in the earth it does not lose its character of movable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing is not necessary and if he produces articles or things, the assessee is entitled for investment allowance. Therefore, even the assembling of parts in some cases is a manufacturing activity. But in assembling of parts the end-product should be different. He places reliance on Narne Tulaman Manufacturers Pvt. Ltd. v. Collector of Central Excise [1990] 183 ITR 577 (SC). In Narne Tulaman Manufacturers Pvt. Ltd.'s case [1990] 183 ITR 577 (SC), their Lordships have considered the provisions of section 2(f) of the Central Excises and Salt Act, 1944, and considered whether any process by which an object becomes new commercial goods having a distinctive name, character or use would be manufacture and can it be said that it is a manufacturing act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words, which has led them to attach an unnatural meaning to the said word." When the word or phrase is not defined under the Act, a normal, meaning of that word should be taken, which is understood in common parlance. The word "erection" has not been used in clause (3) of sub-section (2) of section 32A. In such a case how erection of boiler can be treated as manufacturing of boiler by way of assembling the parts of the boiler and erecting it in a factory. We cannot equate it with weighbridges which are manufactured after assembling some different parts and can be removed and are known in the market with a distinctive name from the parts assembled. In the case in hand the parts of the boiler were known as parts of boiler and not in the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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