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TMI Blog1998 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the value of Rs. 1,30,226 under section 32A of the Income-tax Act, 1961?" This reference pertains to the assessment year 1979-80. The assessee is a company carrying on the business of manufacture of radiators. In its return of income under the Income-tax Act, 1961 ("the Act"), for the assessment year 1979-80, the relevant previous year being the year ended on March 31, 1979, the assessee claimed investment allowance, inter alia, in respect of patterns and dies of the value of Rs. 63,710 and electrical installations of the value of Rs. 1,30,226. The Income-tax Officer did not allow investment allowance in respect of these items as, in his opinion, they did not constitute plant and machinery. He was of the view that the claim for inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Appeals) and dismissed the appeal of the Revenue. Hence, this reference at the instance of the Revenue. We have heard learned counsel for the parties and perused the order of the Tribunal holding the assessee to be entitled to investment allowance in respect of patterns and dies and electrical installations and also the order of the Income-tax Officer by which the claim of the assessee was rejected. Under section 32A of the Act, at the material time, the assessee was entitled to investment allowance equal to 25 per cent. of the actual cost of machinery or plant specified in sub-section (2) thereof, if such machinery or plant was owned by the assessee and wholly used for the purposes of the business carried on by him. The plant and machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86] 157 ITR 86. The Supreme Court referred to the definition of plant given by Lindley L.J., in Yarmouth v. France [1887] 19 QBD 647, and held that : . . . "plant would include any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business." The Supreme Court said : "The test would be : Does the article fulfil the function of a plant in the assessee's trading activity ? Is it a tool of his trade with which he carries on his business ? If the answer is in the affirmative, it will be a plant." Applying the above test, the Supreme Court held that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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