1996 (3) TMI 87

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..... pplication under section 256(1) of the Income-tax Act, 1961 (for short, "the Act"), made by the applicant-Department, referred to this court the following questions, said to be of law, arising out of its order dated May 9, 1991, passed in I. T. A. No. 407/(Ind) of 1989 : " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Commission .....

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..... epreciation on machinery at 30 per cent. and was also given investment allowance under section 32A. The Commissioner of Income-tax, however, on scrutiny of the records of the case, found that the assessment order framed under section 143(3) was erroneous and prejudicial to the interests of the Revenue. He was of the view that the depreciation on machinery should have been allowed at 15 per cent. o .....

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..... ved an application under section 256(1), whereupon the Tribunal has referred the aforesaid questions for the opinion of this court. We have heard Shri D. D. Vyas, learned counsel for the applicant-Department, and Shri H. C. Sarda, learned counsel for the non-applicant/assessee. The controversy projected in the case stands resolved by a decision of the Andhra Pradesh High Court in the case of C .....

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..... rch 31, 1976. The assessee was, therefore, entitled to investment allowance in respect of it ; (ii) that the description given in the Depreciation Schedule in item D(4) of Appendix I, Part I, to the Income-tax Rules, 1962, is not exhaustive but merely illustrative. What is specified there is earthmoving machinery employed in heavy construction work such as dams, tunnels, canals, etc. The use of .....

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..... Rules, 1962, and, therefore, the assessee was entitled to investment allowance as also the depreciation at the rate of 30 per cent. in respect of the equipment. Nothing substantial could be demonstrated before us to take a different view in the matter. We, therefore, answer both the questions in the affirmative, i.e., in favour of the assessee and against the Department, but with no order as to .....

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