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TMI Blog1998 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking within the meaning of section 32A(2)(b)(ii) ? 2. Whether the definition of (plant) given in section 43(3) of the Act should be applied even while determining the value of an industrial undertaking as a small scale industrial under-taking under section 32A(2)(b)(ii) of the Income-tax Act ? 3. Whether, in the facts and circumstances of this case, the assessee is a small scale industrial undertaking and if so, is it entitled to investment allowance ?" The facts in brief are as follows : The assessee carries on the business of manufacture of cigarettes. It claimed investment allowance under section 32A. Since the cigarettes manufactured fall under the items specified in the Eleventh Schedule to the Income-tax Act, the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee : provided that no deduction shall be allowed under this section in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction at 25 per cent. of the actual cost of the road transport vehicles under clause (b) of the proviso to sub-section (1) of section 32A. Sub-section (2) of section 32A provides that the ship or aircraft or machinery or plant referred to in sub-section (1) shall be any new machinery or plant installed after March 31, 1976, in a small-scale industrial undertaking for the purposes of business of manufacture or production of any article or thing. We are not referring to the other provisions which are not relevant for the purpose of disposing of this case. Under Explanation (2), small-scale industrial undertaking is defined. We have already extracted the definition of industrial undertaking. From a reading of subsection (2), it is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession. From a reading of section 43(3), unless the context otherwise requires, the expression "plant" includes vehicles also. In other words, if there is a separate definition of plant other than the definition covered by section 43(3), the definition of plant under section 43(3) has no application. We have already pointed out in the earlier paragraph that Explanation (2) to sub-section (2) of section 32A defines a small-scale industrial undertaking. It defines a small-scale undertaking as an industrial undertaking whose aggregate value of machinery and plant (other than tools, jigs, dies and moulds) installed does not exceed Rs. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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