Commissioner of Income Tax vs Radla Machinery Exports

R.K. Agrawal, J.

The Income Tax Appellate Tribunal, Allahabad Bench, Allahabad has referred the following question of law u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court:

"Whether on the facts and in the circumstances of the case, the Tribunal was, in law, justified in holding that the assessee''s claim for investment allowance u/s 32A as well as additional depreciation u/s 32(l)(iia) on computer is allowable?"

The reference relates to the assessment year 1984-85.

Briefly stated, the facts giving rise to the present reference are as follows:

The assessee is a registered firm which is engaged in the business of purchase and sale of pumps and electric motors. The firm is also having a computer unit known as M/s. Kay Cee Computers which had shown receipt for programming and data processing from the parties. This unit is installed in a separate office premises of M/s. Radla (P) Ltd. which is a trading company and which is working as an agent for doing the work relating to execution of contracts and realisation of receipts for the assessee-firm. During the year under consideration, the assessee claimed investment allowance u/s 32A on the computer machinery installed in this unit. The assessee also claimed additional depreciation u/s 31(1)(iia) on the new machinery installed in this computer unit. The assessee''s claim for investment allowance u/s 32A was disallowed by the assessing officer mainly on the ground that the computer was not used for the purpose of manufacture or production of any article or thing. The claim for additional depreciation u/s 32(1)(iia) was similarly disallowed on the ground that the computer machinery had been installed in the office premises of the company M/s. Radla (P) Ltd., and even if the computer was treated as a plant or machinery and not as an office appliance, the additional depreciation was not allowable as the same had been installed in the office premises. Being aggrieved, the assessee preferred an appeal before the Commissioner (Appeals) who, following the earlier decision of the Commissioner of income Tax for the assessment year 1983-84 in the own case of the assessee, upheld the assessee''s claim for investment allowance u/s 32 of the Act as well as the additional depreciation u/s 32(1)(iia) of the Act. In further appeal by the department, the Tribunal, vide its order dated 24-5-1993 dismissed the appeal and upheld the finding of the Commissioner (Appeals) following its earlier decision in ITA No. 1617 (Alld.) of 1986 in the assessee''s own case for the assessment year 1982-83, The Tribunal placed reliance on the Bombay High Court''s decision in the case of the Commissioner of Income Tax, Bombay City-I Vs. I.B.M. World Trade Corporation, .

We have heard Sri R.K. Upadhaya, learned standing counsel for the revenue. No body has appeared on behalf of the respondent assessee.

We find that this court in income tax Reference No. 17 of 1991 connected with income tax Reference No. 251 of 1992, decided on 30-92005, which is inter-parties and related to the assessment years 1982-83 and 1983-84 has answered similar question in favour of the assessee and against the revenue by following its order in income tax Reference No. 68 of 1987 connected with income tax Reference No. 275 of 1991, CIT v. B.D. Mills 6. Respectfully following the aforesaid decision, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. There shall be no order as to costs.