R.K. Arya Cold Storage and General Mills vs Commissioner of Income Tax

The Income Tax Appellate Tribunal, Delhi, has referred 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 Appellate Tribunal was right in law in holding that the appellant was not entitled to investment allowance u/s 32A of the Income Tax Act, 1961 in respect of the plant and machinery of its cold storage".

Heard Sri Rishi Raj Kapoor learned counsel for the assessee and Sri Shambhoo Chopra, learned Standing counsel for the revenue.

The reference relates to the assessment year 1982-83.

The applicant owns a Cold Storage. It has claimed investment allowance u/s 32A of the Income Tax Act. The claim has been disallowed by the assessing authority, which order has been upheld up to the stage of the Tribunal. In view of the decision of this court in Delhi Cold Storage Pvt. Ltd. Vs. Commissioner of Income Tax, New Delhi, the cold storage is not entitled for investment allowance in respect of plant and machinery installed for running the business of cold storage as it is not engaged in the business of manufacture or processing any new articles.

In view of the above, we answer the question referred to us in affirmative, i.e., in favour of the revenue and against the assessee. There shall be, however, no order as to costs.