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C.I.T.Lucknow v. M/S Prakash Khandsari Udyog Almora - INCOME TAX REFERENCE No. 123 of 1987 [2004] RD-AH 1342 (8 November 2004)


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Court No.37

I.T.R. NO. 123 of 1987

The C.I.T., Lucknow v. M/s. Prakash Khandsari Udyog, Amroha

Hon'ble R.K.Agrawal, J.

Hon'ble Prakash Krishna, J.

The Income Tax Appellate Tribunal has referred the following two questions of law under Section 256(2) of the Income Tax Act, 1961, hereinafter referred to as the Act, for opinion to this Court:-

"1.Whether on the facts an din the circumstances of the case, the Tribunal was right in law in holding that the tractor was not a road transport vehicle and that investment allowance u/s 32A should be allowed on the actual cost of the tractor to the assessee?

2. Whether Tribunal was legally correct in directing the income-tax officer that the investment allowance should be allowed to the assessee according to the provisions of Section 32A of the I.T.Act?"

Briefly stated the facts giving rise to the present Reference are as follows:-

The reference relates to the Assessment Year 1979-80.The respondent is a registered firm and its accounting period was the year ending 31st October, 1978.  It had claimed investment allowance on new generator and tractor which was disallowed by the Income Tax Officer on the ground that the tractor is being used as a road transport vehicle for carriage and transport of sugarcane and machinery etc. and the vehicle has been registered as a road transport vehicle with the Regional Transport Officer.  Therefore, the investment allowance is not admissible under Section 32A (i) (b) of the Act.  The Commissioner of Income-tax (Appeals), Bareilly had confirmed the order of the Income Tax Officer.  However, in further appeal the Tribunal has allowed the claim.

We have heard Sri Dhananjay Awasthi, learned Standing Counsel appearing for the Revenue.  Nobody has appeared for the respondent.

We find that this question as to whether investment allowance on a tractor is admissible or not has been considered by this Court in the Case of commissioner of Income-Tax v. U.P. Paschimi Kshetriya Vikas Nigam Ltd., (2003) 264 ITR 273 and has held that tractor would not be covered under the word ''road transport vehicles', therefore, entitled  to investment allowance.

Respectfully following the aforesaid decision, we answer both the questions referred to us in the affirmative i.e. in favour of the assessee and against the Revenue.




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