Patna High Court
Commissioner Of Income-Tax vs Dr. L.C. Mitra on 6 May, 1997
Equivalent citations: [1998]234ITR805(PATNA)
Author: Bisheshwar Prasad Singh
Bench: Bisheshwar Prasad Singh
JUDGMENT
1. These two references involve a common question formulated for the opinion of this court and they relate to two assessment years 1981-82 and 1982-83 are in respect of the same assessee.
2. The Income-tax Appellate Tribunal, Patna Bench, Patna, has referred the following question for the opinion of this court :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to investment allowance in this case ?"
3. The facts of the case as stated in the statement of case are that the assessee is a doctor. He made additions in the existing X-ray units and E.C.G. plants during the assessment years under consideration and claimed investment allowance of Rs. 9,643 and Rs. 1,860 respectively. The assessing authority held that the assessee was not entitled to claim any investment allowance on these articles because they were not producing articles and things as envisaged in Section 32A of the Income-tax Act. On appeal, the Appellate Assistant Commissioner held that the assessee was engaged in producing X-ray films and, therefore, he fulfilled the requirement of the section. He, therefore, allowed the appeals and directed the assessing authority to allow investment allowance for the two years in question. The Revenue preferred an appeal before the Appellate Tribunal. Before the Appellate Tribunal, it was argued on behalf of the Department that it was not the X-ray machine on which the claim for investment allowance was made, because the claim was based on additions made to the X-ray machines by purchase of additional parts. The machines in question had already been brought into use in the preceding years. The assessee, on the other hand, contended that a machinery should not be distinguished from the machine on which investment allowance could be allowed.
4. The Tribunal took the view that the plea of the Revenue was misconceived. It held that if the parts of the machinery could not be considered to be machinery, they could certainly be considered as plant. Section 32A entitled the assessee to claim investment allowance not only in respect of the machinery, but also on plant. Accordingly, the Tribunal accepted the plea of the assessee that he was entitled to claim investment allowance in respect of the parts of X-ray machines during the assessment years in question.
5. Counsel for the Department contended before us that Section 32A of the Income-tax Act, 1961, particularly, Sub-section (2) thereof, made it quite clear that an assessee could not claim investment allowance unless the assessee was a small scale industrial undertaking, or any other industrial undertaking. In the instant case, the assessee was a doctor who could not be said to be either a small scale industrial undertaking or any other industrial undertaking.
6. Unfortunately, the submission urged before us was not urged before any of the authorities under the Act or before the Tribunal. Counsel for the Department also fairly conceded that this point was not urged either before the assessing authority or before the Appellate Assistant Commissioner or the Tribunal. In the absence of such plea being raised and considered by the authorities under the Act, he could not place any authority before us to satisfy us that such a plea could be allowed to be taken for the first time before this court in a reference under Section 256(1) of the Income-tax Act, 1961. No other submission was urged before us. We are satisfied that the reasoning given by the Tribunal in upholding the claim of the assessee is fully justified. In these circumstances, we answer the reference in the affirmative, in favour of the assessee and against the Department.