Commissioner Of Income Tax-I Indore vs. Premier Industries India Ltd. Indore

Income Tax Appeal No.79/2005 02.01.2014 Shri R.L. Jain, learned Senior Counsel with Ms. Veena Mandlik, learned counsel for the appellant. Heard on the question of admission. This appeal under Section 260-A of the Income Tax Act, 1961 (for short, the Act) is directed against the order dated 26.10.2004 passed by the Income Tax Appellate Tribunal, Indore Bench (for short, the Tribunal) in ITA No.212/2003. It has been argued by the learned Senior Counsel for the appellant that the Tribunal was not justified in allowing the Investment Allowance, when the plant and machinery were not being put to use. We find that the Tribunal while dealing with this ground in paragraphs 3 to 6 of the order dated 26.10.2004 has observed thus: - “3. Ground no.2 During asstt. Proceedings, AO noticed that assessee had shown the value of new plant and machinery at Rs.56,68,614/- on which depreciation was allowed as claimed by the assessee in the Milk Divn. (Premier Nutrition) plant & machinery of Rs.1,65,84,637/- (i/c pre- operative expenses of Rs.59,91,690/-) were shown as work-in-progress and no depreciation was claimed. However, while claiming investment allowance the assessee had included the plant and machinery which were under erection AO observed that investment allowance was available after the machinery was erected and installed and started production and in this background,

investment

allowance

of Rs.37,43,678/- was disallowed. CIT (A) allowed the claim of investment allowance, as, according to him, the same was allowable once the machinery was installed. 2 4. Before us, ld. DR supported the order of AO. 5. On the other hand, ld. AR referred to page 10 which is schedule of fixed assets and pointed out that AO has confused the figures of plant and machinery and work-in-progress. AO has mentioned that in Milk Divn., the work-in- progress was Rs.1,65,84,637/- whereas from the schedule it would become clear that plant and machinery worth Rs.1,65,84,337/- was shown as additional in assets and capital work in progress was only Rs.59,91,690/-, then he referred to page 8 which is copy of certificate issued by Distt. Industries Centre, Dewas in which it is clearly stated that assessee had installed Tetra pack machine on 28.03.87. He then referred to provisions of sec.32A and submitted that investment and plant was installed and it is not necessary that the same should be put to use. 6. We have considered the rival submissions carefully and have gone through the relevant material on record. From perusal of records, we find that investment allowance has been claimed on plant and machinery installed in Milk Divn. as well as Soya Divn. as far as machinery worth Rs.4219329/- in Soya Divn. in concerned, the details are not very clear, therefore, this issue is set aside to the file of AO for verification whether the same was installed or not. AO is further directed to allow investment allowance if these machines have already been installed because as per sec.32A investment allowance is available on mere installation of machinery. As far as machines of Milk Divn. is concerned, the same has already been installed by the assessee as it becomes clear from the certificate of Distt. Industries Centre, Dewas (copy of certificate at page 8). In this respect, we find nothing wrong with the order of ld. CIT (A) and confirm the same.” 3 Having gone through the aforesaid order passed by the Tribunal, we find that the Tribunal has rightly allowed the Investment Allowance on machines for Milk Division having found that they have already been installed by the assessee and the same was even duly certified by the District Industries Centre, Dewas. As regard the machinery of Soya Division, as details were not available, the AO was directed for making verification as to whether the same was installed or not.

In our considered view, once the machines have already been installed, the benefit of Investment Allowance is available to the assessee and it cannot be denied on the ground that they have not been put to use. In the circumstances, no case for interference in the order passed by the Tribunal is made out.

The appeal fails and is hereby dismissed.

(Shantanu Kemkar) (Mool Chand Garg) Judge

Judge Pithawe RC