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TMI Blog1992 (5) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... opinions in the matter ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that machinery used for manufacture of electric bulbs and fittings is not entitled to investment allowance under section 32A of the Act ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that grant of investment allowance in the original assessment in respect of machinery used for manufacture of electric bulbs and fittings was a mistake apparent from the records which could be rectified under section 154 of the Act ?" The facts, briefly stated and as appear from the statement of case, are that the original assessment in this case for the assessment year 1978-79 was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to investment allowance on machinery for manufacture of bulbs and electric fittings is a debatable one and that any amendment in the original order is merely due to change of opinion and, therefore, beyond the ambit of section 154. He further held that the provisions of section 154 could not have been invoked for rectifying the assessment order on the point. Both the parties, feeling aggrieved by the order of the Commissioner of Income-tax (Appeals), came up in appeal before the Tribunal. The Tribunal, after considering the facts and circumstances of the case and after hearing the parties, held that electric bulbs and fittings are clearly domestic electrical appliances as they are normally used in households and also in hotels, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act on the plant and machinery used for the manufacture of electric bulbs and fittings can be rectified in a proceeding under section 154 of the Income-tax Act, 1961. It has been submitted on behalf of the assessee that the decision of the Tribunal is not sustainable in law. The submissions of the assessee are as follows : Section 32A of the Act allows investment allowance on the plant and machinery owned by an assessee and is wholly used for the purpose of business carried on by him. Section 32A(2) of the Act lays down, inter alia, that plant and machinery which are entitled to investment allowance shall be used for the purposes of the business of construction, manufacture or production of any article or thing, not being an article o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormally used in households and similar appliances used in places, such as, hotels, restaurants, hostels, offices, educational institutions and hospitals. The word "appliance", according to the Random House Dictionary, means, an instrument, apparatus or device for a particular purpose or use ; a piece of equipment, usually operated electrically, especially for use in houses or for performance of domestic chores such as refractory, washing machines, toaster, electric shaver, electric stove, electric oven, etc. In this connection, our attention was drawn to the judgment and decision of the Madhya Pradesh High Court in the case of CIT v. Kalpana Lamp Components Pvt. Ltd. [1989] 178 ITR 330. It was held that fluorescent tubes manufactured by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, high wattage lamps for industrial and public lighting, infra and medical apparatus, photographic lamps and other special purpose lamps. These articles cannot, in any event, be treated as domestic electrical appliances and plant and machinery used for the manufacture of such articles are entitled to investment allowance as such articles, by any stretch of imagination, cannot fall under item No. 12 of the Eleventh Schedule. In any event, the fittings which are manufactured by the assessee in its Luminaire factory cannot be treated as domestic electrical appliances. Hence, investment allowance on plant and machinery used in the manufacture of electric light fittings (at Luminaire factory) cannot be denied. It was further urged that, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint, it could not be said that the issue was free from doubt and, hence, the order of rectification was not valid. On a reference, it was held that the validity of the action of the Income-tax Officer must be judged on the facts as they were at the time when the action was taken. When the said rectification was made in March, 1969, no decision of any other High Court taking a contrary view was referred to the Income-tax Officer or for that matter to the Appellate Assistant Commissioner or the Tribunal. All the High Courts had since held uniformly that extra shift allowance for seasonal factories had to be allowed in proportion to the actual number of days for which the plant and machinery had worked extra shift. The language of the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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