9911796707
TMI Blog1984 (1) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... and Dahaj Amod Mular State High Way. The total receipts on the work executed by the assessee is Rs. 1,20,08,964 on which gross profit disclosed by the assessee is Rs. 12,40,726 as against gross profit of Rs. 11,41,394 on total receipts of Rs. 81,63,991 shown in immediate preceding year. Before the ITO, the assessee claimed that the assessee is entitled for investment allowance of Rs. 77,263 on tractors and trailors. According to him, the tractors and trailors are machinery and are eligible for investment allowance. The tractors are used for construction of dam. The ITO did not agree with the claim of the assessee. According to him, the business in respect of construction of dam and road cannot be considered as industrial undertaking. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the rival submissions and considered the material on record. Before going to the issue whether tractors and trailors are part of the machinery or not we have to see whether the assessee is an industrial undertaking. In s. 32A sub-s.(2), cl.(b) sub-cl.(iii), definition of 'industrial undertaking' is given. We reproduce the same for ready reference: "32A(2)(b)(iii). In any other industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in he list in the Eleventh Schedule." From the reading of sub-clause it appears that if the assessee is engaged in construction, manufacture or production of any articles or thing which is not specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturing, production or processing of goods or articles or in mining or in the generation or distribution of electricity or in other form of power". The assessee, a wholly owned Government company, was engaged in the construction of dams, barrage etc., of a considerable magnitude. Now the question before their Lordships was whether the assessee is an industrial undertaking in view of the above definition. Their Lordships answered the question in the affirmative and in favour of the assessee. A similar issue was considered by the Tribunal in the case of Progressive Engineering Co. vs. ITO (1983) 3 ITD 172 (Hyd). The facts before the Tribunal were that the assessee was doing business as contractors and claimed investment allowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of a thing and is covered by the definition of "industrial undertaking" given in s. 32A(2)(b)(iii). 6. Now, the only question remaining for our consideration is whether tractors and trailors are entitled for investment allowance. The ld. counsel Shri Divatia drew our attention towards the order of the Tribunal referred to above as well as the decision of the Calcutta High Court in the case of Orissa Minerals Development Co. Ltd. vs. CIT (1979) 117 ITR 434 (Cal) wherein their Lordships have considered the issue whether tractors and dumpers are road transport vehicles or not. Their Lordships pointed out at p. 436 that in case of depreciation admissible to different machineries the tractors and dumpers are under the different hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehicle does include tractors and dumpers, bulldozers, etc. Therefore, following the decision of their Lordships of the Calcutta High Court and the Circular of the Board referred to by the Calcutta High Court at p. 437 of the reports, we are of the view that tractors and trailors are eligible for investment allowance in view of the facts of this case. 7. The next issue for our consideration whether the ld. CIT(A) has erred in law and on facts in disallowance of Rs. 2000 out of motor car expenses and Rs. 870 out of depreciation on car. Total expenditure of car was estimated at Rs. 8,000 and 1/4th thereof was disallowed by the ITO and 1/4th depreciation on the car was also disallowed. The view taken by the ITO was confirmed by the CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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