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TMI Blog1985 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicles falling within the proviso (2)(b) to s. 32A. In this behalf, the assessee is in appeal and we will consider that question when we take up that appeal. 4. Shri R.d. Mahadeshwar, the ld. Departmental representative mainly depended upon the decision of the Bombay High Court in the case of the assessee itself CIT vs. Sha Construction Co. Ltd. (1982) 30 CTR (Bom) 245 : (1983) 142 ITR 696 (Bom) and contended that investment allowance cannot be granted. In this connection, we were also invited to the decision of the Bombay High Court in the case of CIT vs. N.U.C. Pvt. Ltd. (1980) 126 ITR 377 (Bom). On behalf of the assessee, Shri S.P. Mehra, replied that while the decision relied upon on behalf of the Revenue do not directly deal with the case of investment allowance under s. 32A. He proceeded to submit that the decision of the Special bench of the Tribunal in the case of ITO vs. Hydle Constructions (P) Ltd. (1983) 6 ITD 575 (Del) (SB) and the decision of the Hyderbad Bench of the Tribunal in the case of Progressive Engineering Co. vs. ITO (1983) 3 ITD 172 (Hyd) directly answer this question. He also invited out attention to the decision of the Bombay High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord that business activity of the assessee is not one specified in the list in the Eleventh Schedule. SO we are now to see whether the business of constructing dams, bridges, buildings etc., is a business of construction of any articles or thing, we may now alone say that the same type of business was carried on by Progressive Engg. Co. and it was held to be entitled to investment allowance by the Hyderabad Bench of the Tribunal. The facts are identical. The Special Bench of the Tribunal has in Hydle Construction case (1983) 6 ITD 575 (Del) held that the assessee in that case which was also carrying on civil engineering construction works was eligible for investment allowance. According to these two decisions of the Tribunal, constructing dam, bridge or any other building is an article or thing and that business of construction is sufficient to meet the requirements of cl. 2(iii) of s. 32A. 7. Referring to CIT vs. Pressure Pilling Co. (1980) 126 ITR 333 (Bom), the assessee in the case was carrying on the business of laying foundations of building by a specialised patented method known as "pressure piling" and claimed relied under s. 80J. Their Lordships held that the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) which has also been considered by the first appellate authority. The rule enunciated in this case is not applicable as the facts are entirely different. As pointed out by the first appellate authority, in Sutlej Cotton Mills Ltd., foreign currency had been held by the assessee and conversion had taken place. Such a situation does not obtain here at all. The advances had to be adjusted on future bills. Until such adjustments take place, the money does not assume the character of income. Unless adjustment is made and the receipt results either in profit or loss, the question of taxing does not arise. It is only for accounting purposes the foreign currency reserve had been taken into account and by that it cannot be said that the assessee had made an income of that foreign currency. In our opinion, the view taken by the first appellate authority is in accordance with law and, therefore, no interference is called upon. The deletion of addition of Rs. 4,59,098 is, therefore, confirmed. 9. The third ground raised by the Revenue is in regard to relief under s. 80-O. In the same context we may also consider ground number 5 in the assessee's appeal which is also in regard to relief und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd we are, therefore, of the view that the same is required to be set aside here. On the above mentioned reasons, the remand order is set aside and we direct that the issue pertaining to s. 80-O shall be considered by the CIT(A) on merits and he shall quantify of deduction under s. 80-O after affording an opportunity to the assessee of being heard. 11. We have thus disposed of all the grounds raised in the appeal by the Revenue. Now taking up the appeal by the assessee, there are five grounds in all, the last (5) being relating to relief under s. 80-O. This, we have already considered in para 9 and our conclusion is found recorded in para 10. What remains to be considered is only grounds No. 1 to 4 and we take up in the order in which they are set out in the memorandum of appeal. 12. The first ground is in regard to disallowance of investment allowance in regard to dumpers. The claim in regard to dumper was to the extent of Rs. 1,19,930. The ITO rejected the claim and that was confirmed by the CIT(A) for identical reasons. The authorities below are of the view that there dumpers are road transport vehicles so a to come within the second proviso to s. 32A(i) to be disentitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of Rs. 2,34,651 and this payment had to be made because of delayed payment of income-tax. The assessee claimed this as business expenditure and that was not allowed by the authorities below. The CIT(A) has considered this aspect in para 3 of his order. As pointed out by him, s. 80V provides for deduction in respect of interest paid by an assessee on monies borrowed for payment of income-tax. The Income-tax liability itself is not an allowance deduction and, as such interest paid for delayed payment of income-tax cannot be a prior allowed since character of the interest amount is the same as the principal liability. In this connection, the decision of the Delhi High Court in the case of Bharat Commerce Industries Ltd. (1985) 45 CTR (Del) 1 : (1985) 153 ITR 275 (Del), is in point. This authority clearly lays down that interest paid for delayed payment of tax would take the same colour as the original amount liable to be paid. Interest charged by the Department on account of default in payment of Income-tax cannot be brought within the ambit of s. 80V. This can certainly be not treated as business expenditure and, in our opinion, the authorities below rightly disallowed the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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