Associated Bearing Co. Ltd. v. CIT

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The Tax Publishers2006 TaxPub(DT) 0799 (Bom-HC) : (2006) 286 ITR 0341 : (2006) 205 CTR 0150 : (2006) 157 TAXMAN 0028 Associated Bearing Co. Ltd. v. CIT INCOME TAX ACT, 1961 Investment allowance- Allowability-Calculators and factory cleaning machines Assessee was engaged in manufacturing of ball bearings. It claimed investment allowance under section 32A on calculators for the first relevant assessment year and factory cleaning machines for the second assessment assessment year. AO disallowed the claim of the assessee and held that the calculators and factory cleaning machines could by no means be termed as plant and machinery. *Held:It is well settled that the word plant must be given a very wide meaning and plant includes a person for carrying on his business uses. Data processing machines, computers, weighing scales and cranes and items of similar nature are held to be plant. Thus, the reasons given by the department for not granting investment allowance were clearly erroneous and CIT (A) as well as Tribunal was right in directing ITO to allow investment allowance on calculators for the first relevant assessment year and factory cleaning machines for the second relevant assessment year. Income Tax Act, 1961* Section 32A Case Law Analysis:Referred:CIT v. Taj Mahal Hotel [1971] 82 ITR 44 (SC) [Para 3], CIT v. Elecon Engg. Co.Ltd. [1974] 96 ITR 672 (Guj.) [Para 3], CIT v. Elecon Engg. Co. Ltd. [1987] 166 ITR 66 (SC) [Para 3], CIT v. IBM Word Trade Corpn. [1981] 130 ITR 739 (Bom.) [Para 3], CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55 (Bom.) [Para 3], CIT v. Mahindra Ugine Steel Co. Ltd. [1999] 233 ITR 204/ 105 Taxman 407 (Bom.) [Para 3], CIT v. Electronics Research Industries (P.) Ltd. [1991] 192 ITR 20 / 59 Taxman 46 (Kar.) [Para 6], CIT v. Mahant Oil Industries (P.) Ltd. [1993] 193 ITR 620 / 59 Taxman 189 (Kar.) [Para 6], CIT v. Jokai India Ltd. [2001] 251 ITR 39 /118 Taxman 14 (Cal.) [Para 6], Mehsana Distt. Co-op. Milk Producers Union Ltd. v. CIT [2002] 256 ITR 322/ 121 Taxman 689 (Guj.) [Para 6], CIT v. Tube Investments of (India) Ltd. [2003] 261 ITR 753 (Mad.) [Para 6], Tribeni Tissues Ltd. v. CIT [1991] 190 ITR 487 (Cal.) [Para 6], Calcutta Electric Supply Co. Ltd. v. Addl. CIT [1982] 136 ITR 777/ 9 Taxman 81 (Cal.) [Para 8], Kirloskar Electric Co. Ltd. v. CIT [1978] 115 ITR 907 (Kar.) [Para 9], CIT v. Gujarat State Fertilizers Co. Ltd. [2003] 259 ITR 526/ 126 Taxman 572 (Guj.)(FB) [Para 12], CIT v.Baker Mercer India (P.) Ltd. [1992] 196 ITR 667 / 55 Taxman 226 (Bom.) [Para 15], Padamjee Pulp & PaperMills Ltd. v. CIT [1994] 210 ITR 97 (Bom.) [Para 15], CIT v. Motor Industries Co. Ltd. [1988] 173 ITR 374 (Kar.) [Para 15], CIT v. Widia India Ltd. [1992] 193 ITR 574 (Kar.) [Para 15], Khatau Makanji Spinning & Weaving Co.Ltd. v. CIT [1996] 222 ITR 472 /[1995] 79 Taxman 446 (Bom.) [Para 16], CIT v. Shri Ambika Mills Ltd. [1993]201 ITR 63 (SC) (St.) [Para 16] and CIT v. Modu Timblo [1994] 206 ITR 647 /[1993] 70 Taxman 585 (Bom.) [Para 16]. Decision: In favour of Assessee. A.Y. 1979-80 and 1980-81 SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2006 TaxPub(DT) 0799 (Bom-HC) : (2006) 286 ITR 0341 : (2006) 205 CTR 0150 : (2006) 157 TAXMAN 0028

Associated Bearing Co. Ltd. v. CIT

INCOME TAX ACT, 1961

Investment allowance- Allowability-Calculators and factory cleaning machines

Assessee was engaged in manufacturing of ball bearings. It claimed investment allowance under section 32A on calculators for the first relevant assessment year and factory cleaning machines for the second assessment assessment year. AO disallowed the claim of the assessee and held that the calculators and factory cleaning machines could by no means be termed as plant and machinery. Held:It is well settled that the word plant must be given a very wide meaning and plant includes a person for carrying on his business uses. Data processing machines, computers, weighing scales and cranes and items of similar nature are held to be plant. Thus, the reasons given by the department for not granting investment allowance were clearly erroneous and CIT (A) as well as Tribunal was right in directing ITO to allow investment allowance on calculators for the first relevant assessment year and factory cleaning machines for the second relevant assessment year.

Income Tax Act, 1961 Section 32A

Case Law Analysis:Referred:CIT v. Taj Mahal Hotel [1971] 82 ITR 44 (SC) [Para 3], CIT v. Elecon Engg. Co.Ltd. [1974] 96 ITR 672 (Guj.) [Para 3], CIT v. Elecon Engg. Co. Ltd. [1987] 166 ITR 66 (SC) [Para 3], CIT v. IBM Word Trade Corpn. [1981] 130 ITR 739 (Bom.) [Para 3], CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55 (Bom.) [Para 3], CIT v. Mahindra Ugine Steel Co. Ltd. [1999] 233 ITR 204/ 105 Taxman 407 (Bom.) [Para 3], CIT v. Electronics Research Industries (P.) Ltd. [1991] 192 ITR 20 / 59 Taxman 46 (Kar.) [Para 6], CIT v. Mahant Oil Industries (P.) Ltd. [1993] 193 ITR 620 / 59 Taxman 189 (Kar.) [Para 6], CIT v. Jokai India Ltd. [2001] 251 ITR 39 /118 Taxman 14 (Cal.) [Para 6], Mehsana Distt. Co-op. Milk Producers Union Ltd. v. CIT [2002] 256 ITR 322/ 121 Taxman 689 (Guj.) [Para 6], CIT v. Tube Investments of (India) Ltd. [2003] 261 ITR 753 (Mad.) [Para 6], Tribeni Tissues Ltd. v. CIT [1991] 190 ITR 487 (Cal.) [Para 6], Calcutta Electric Supply Co. Ltd. v. Addl. CIT [1982] 136 ITR 777/ 9 Taxman 81 (Cal.) [Para 8], Kirloskar Electric Co. Ltd. v. CIT [1978] 115 ITR 907 (Kar.) [Para 9], CIT v. Gujarat State Fertilizers Co. Ltd. [2003] 259 ITR 526/ 126 Taxman 572 (Guj.)(FB) [Para 12], CIT v.Baker Mercer India (P.) Ltd. [1992] 196 ITR 667 / 55 Taxman 226 (Bom.) [Para 15], Padamjee Pulp & PaperMills Ltd. v. CIT [1994] 210 ITR 97 (Bom.) [Para 15], CIT v. Motor Industries Co. Ltd. [1988] 173 ITR 374 (Kar.) [Para 15], CIT v. Widia India Ltd. [1992] 193 ITR 574 (Kar.) [Para 15], Khatau Makanji Spinning & Weaving Co.Ltd. v. CIT [1996] 222 ITR 472 /[1995] 79 Taxman 446 (Bom.) [Para 16], CIT v. Shri Ambika Mills Ltd. [1993]201 ITR 63 (SC) (St.) [Para 16] and CIT v. Modu Timblo [1994] 206 ITR 647 /[1993] 70 Taxman 585 (Bom.) [Para 16].

Decision: In favour of Assessee.
A.Y. 1979-80 and 1980-81