9911796707
TMI Blog1986 (7) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... volved is whether ropeway for carriage of timber is a manufacturing activity and, therefore, the assessee is entitled to investment allowance on the ropeway. According to the ITO, the assessee was not engaged in any manufacturing or production activities. The business of the assessee was transportation of timber through ropeway and, therefore, the assessee was not entitled to investment allowance under s. 32A of the Act. He disallowed the claim accordingly. The CIT(A) following his order dt. 15th March, 1984 in the case of the assessee herself for the asst. yr. 1980-81 held that the assessee was entitled to investment allowance under s. 32A of the Act and directed the ITO to allow investment allowance amounting to Rs. 1,34,480. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. He pointed out that that assessee put up three ropeways as under: (i) Sungri Ropeway, (ii) Gawas Ropeway, and (iii) Nihari Ropeway. For putting up these ropeways the assessee had purchased plant and machinery of the value of Rs. 1,20,232 and Rs. 2,93,255 and Rs. 1,84,594 respectively. The machinery consisted of wire ropes, driving units i.e. engines, differential gear-boxes, brakes etc.), Lasso pulleys and hangers, rope hooks, tools and accessories. The total value of the plant and machinery, according to the ld. Counsel for the assessee, for three ropeways was, therefore, Rs. 5,18,080 on which the assessee was entitled to investment allowance at Rs. 1,29,520 at the rate of 25 per cent thereof. According to him, the activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing ropeways the assessee had assembled various components. According to him, mere assembling of components was not an industrial or manufacturing activity. He further pointed out that the business of the assessee was not manufacturing of ropeways but of transportation of timber as was evident from the agreement entered into by the assessee with M/s Babu Ram Sons and for carrying out the activity of transport, the assessee had to bring into existence the ropeways. He also stated that after the contract wit M/s Babu Ram Sons was over, the ropeway was to be dismantled whereas the manufacturing activity should be a continuous process as held by the Special Bench of the Tribunal in the case Hydle Construction (P) Ltd. relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of manufacture or production of any article or thing as its business. As noted earlier, the business of an assessee is not manufacturing or production of ropeways but transportation of timber by means of ropeways. It, therefore, does not qualify for deduction under s. 33A. We are also in agreement with the ld. Departmental Representative that mere assembly of components will not constitute industrial activity or an industrial undertaking. The Special Bench of the Tribunal in ITO vs. Hydle Constructions (P) Ltd. (1984) 20 TTJ (Del) 518 : (1984) 41 CTR (Trib) 17 (Del) : (1983) 6 ITD 575 at 576 (Del) has held that the words "engaged in manufacture, production or processing of goods" should normally mean continuously occupied in the manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ride, horseback journey, a road incursion, a track suitable for wheeled traffic especiality for through communication (often in street-names), a highway, a roadway, a way of approach, course, a mine passage a road-stead, a railway, journeying, wayfaring, tour etc.". Road, therefore, does not imply that it is to be on the surface of the earth alone. Even railway track is covered under the meaning of road. It is a way of approach whether in the atmosphere or on the surface of the earth or sea. The activity of transportation by the assessee is also, therefore, covered by the words "road transport", being one of the prohibition for grant of investment allowance in proviso (b) below sub-s. (1) of s. 32A. Taking into consideration the totality o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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