9911796707
TMI Blog1993 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. depreciation on the ground that it was a small scale industry. The Income-tax Officer rejected the contention raised on behalf of the assessee that the written down value of the machinery on the last day of the previous year was to be taken into consideration. The assessee preferred an appeal before the Appellate Assistant Commissioner. The appeal was allowed on the ground that the asessee-company was registered as a small scale industry with the State Small Scale Industries Department and that as the actual cost occurring in part (3) of the Explanation to clause (vi) of section 32(1) would mean in respect of the expenditure of the machinery installed in the earlier year as written down value of that machinery, the aggregate value of the machinery and plant installed by the assessee-company did not exceed Rs. 7,50,000. The Revenue then preferred an appeal to the Tribunal challenging the order passed by the Appellate Assistant Commissioner. The Tribunal held that as the assessee's industrial undertaking is registered as a small scale industry with the State Small Scale Industries Department, there was no reason why the benefit of section 32(1)(vi) should not be given to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (1) or sub-section (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for the assessment year in respect of which he first became entitled to deduction under this clause, furnish to the Income-tax Officer a declaration in writing that the provisions of this clause shall not apply to him, and if he does so, the provisions of this clause shall not apply to him for that assessment year and for every subsequent assessment year ; so, however, that the assessee may, by notice in writing, furnish to the Income-tax Officer before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139, whether fixed originally or on extension, for furnishing the return of income for any such subsequent assessment year, revoke his declaration and upon such revocation, the provisions of this clause shall apply to the assessee for that subsequent assessment year and for every assessment year thereafter : Provided further that no deduction shall be allowed under this clause in respect of- (a) any machinery or plant installed in any office premises or any residential accommodation, including any accommodation in the nature of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in which the machinery or plant was installed or the year in which the assessee had put it to use. But this special depreciation was confined to small scale industrial undertakings. Thus, it was a special provision made for the benefit of small-scale industrial undertakings. By the Explanation, "new ship" and "new machinery or plant" were defined. The Legislature also provided by that Explanation as to which undertaking was to be regarded as a small-scale industrial undertaking. By the said Explanation, it also provided how the value of the machinery or plant was to be determined. Thus, it cannot be gainsaid that the Legislature thought it fit to make a special provision in this behalf. If registration of an industrial undertaking with the respective State department was to be regarded as sufficient for making such undertaking a small-scale industrial undertaking, then the Legislature would not have made this special provision. Moreover, that would have resulted in discrimination inasmuch as the test laid down for treating an industrial undertaking as a small-scale industrial undertaking might have varied from State to State. Thus, the Legislature, in order to see that there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day of the previous year was to be taken into consideration for the purpose of deciding whether it exceeded the limit of Rs. 7,50,000. We cannot, therefore, construe the aggregate value of the machinery and plant installed as the aggregate value of the machinery and plant installed during the previous year. The intention of the Legislature clearly appears to be to give special benefit to those undertakings which did not have machinery and plant of the value of more than Rs. 7,50,000. If the interpretation as suggested by learned counsel for the assessee is accepted, then, an industrial undertaking which had, in the first year, installed machinery and plant worth say Rs. 7,00,000 and which had again installed machinery and plant worth say Rs. 7,00,000 in the subsequent year, would have become entitled to the benefit of this provision even though its plant and machinery were of a total value of Rs. 14,00,000. Again, the alternative contention also cannot be accepted for the simple reason that the Legislature itself had provided how the aggregate value of machinery and plant was to be determined. It was provided by the Explanation that the value of any machinery or plant for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
