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TMI Blog1986 (5) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... essee would be used in the accounting and financial operations of the assessee-company and so, was in the nature of office equipment. It is argued by the assessee that the computer in question cannot be described as accounting machine or office equipment. According to the assessee, it is used to generate various information, report and operational data relating to mining activity, mining machinery capacity utilisation, inventory control and pay roll. I am inclined to agree with the assessee. It would be an over-simplification to say that the computer is an office equipment. The computer in the present case is no doubt installed in the head office of the company and may appear to be disentitled to investment.allowance by virtue of clause (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, say, a typewriter. It was also submitted that the recent Finance Bill specifically provides for investment allowance on computers. Further, reliance was placed on a decision of the Bombay Bench 'C' of the Tribunal in IT Appeal No. 3826 (Bom.) of 1982 dated 25-5-1984, where the question of allowing extra shift allowance on computers was being considered. The ITO had denied investment allowance also. The Commissioner (Appeals) reversed his finding and the Commissioner (Appeals)'s finding has been accepted by the revenue. The learned representative of the assessee, thus, submitted that investment allowance should not be disallowed on the computer. 7. Although this is the revenue's appeal, we have placed the arguments of the assessee-respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e., information relevant for managerial decisions are being supplied by the computer. This essentially is the work of an office equipment and, hence, the computer is not entitled to investment allowance. 8. Although it may be sufficient for us to say that in IT Appeal No. 3826 (Bom.) of 1982 it is made clear that the decision directing investment allowance on computers has been accepted by the department and, therefore, it is not necessary to say anything further in the matter, we feel that the matter being of considerable importance, deserves a more detailed analysis : (i) In the initial stages, calculating machines with printing or typing facilities were invented. But the computer is.not just an electronic calculator. Information is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a trillionth of a second (peikosecond) is more of a plant than an office equipment. Originally, development rebate was introduced withe a view to encourage industrial development. Development rebate was allowable on plants. But when the definition of 'plant' was extended to all types of equipment including those which do not substantially contribute to the production or manufacture of articles, like, for example, typewriters, small calculators, fans and air-conditioners in offices, the Legislature introduced a provision that development rebate should not be given in respect of office equipment. At that stage an instrument of great versatility like the computer was not thought of at all. Realising that industrial development would be great ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The argument that the same work could be done be manual labour, i.e., a cleak can sit and note down the performance of the machines, which is essentially an office work and, as such, what the computer does is also office work, cannot be accepted. In fact, practically everything that a man is capable of doing is being done by a machine in a quicker and more efficient way. Therefore, where the work relates to the performance of machine and the information is supplied through another machine, the latter machine, in our opinion, cannot be treated as an office equipment. The computer is used for the control of the machinery and is, therefore, not an office equipment. It is not necessary that the computer itself has to do the switching on and off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly the matter has to be further examined in the light of the observations of the High Court in paragraphs 6 and 7. We, therefore, remit the matter back to the Commissioner who will pass an order after considering the evidence on record and after giving an opportunity to the assessee of being heard." (vi) In the light of the above decision, we hold that the computer being housed in a separate room with air-conditioning facility cannot be treated as a part of the general office premises. The room housing the air-conditioner cannot be treated as a part of the administrative office. In the result, we hold that the assessee is entitled to investment allowance on the computers. 9. In the result, the appeal is dismissed. - - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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