JUDGMENT
Suhas Chandra Sen, J.
1. Tribunal has referred the following question of law to this court under Section 256(1) of the Income-tax Act, 1961 :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not upholding the finding of the Commissioner of Income-tax (Appeals) to the effect that the computer installed in the factory premises does not form a part of the manufacturing unit intimately connected with the production of manufacturing of any article or thing and as such investment allowance under Section 32A of the Income-tax Act of Rs. 35,814 as claimed by the assessed was not allowable ?”
2. The assessment year involved is 1984 for which the accounting year ended on March 31, 1984. About the use of the computer in question, the Tribunal has found the following facts :
In this case, there is no dispute that the computer has been installed in the special cabin constructed within the factory premises. The computer was used for processing raw materials, data, straw data, wages and salaries payments, etc., and also for monitoring the details of production. In such a case, if we apply the functional test on the fact of the computer installed here, it is in the line of the manufacturing process in the cable division of the assessee.
3. It has been contended on behalf of, the Revenue that this computer was not used for manufacture but the Tribunal’s finding is that the computer is used for processing raw materials, data, straw data, and for monitoring the details of production. If that be so, we fail to see how it is not a part of the business of manufacture of the cable division of the assessee. The Tribunal has found that the computer has been installed in a special cabin constructed within the factory premises itself.
4. On behalf of the Revenue, reliance was placed on a judgment of this court in the case of CIT v. Technico Enterprises Pvt. Ltd. [19941 206 ITR 36. But in that case a specific finding of fact was that the computer was purchased and utilised for accounting purposes only. On the basis of that finding, the court came to the conclusion that the computer did not qualify for additional depreciation or investment allowance. But this judgment must not be read as to have laid down that under no circumstance can a computer be utilised for manufacturing purpose.
5. There is a judgment of the Bombay High Court on this point in the
case of CIT v. I.B.M. World Trade, Corporation [1981] 130 ITR 739, It was hold that the computer utilised in that case should be treated as an apparatus and as a plant for the purpose of Section 43(3) of the Income-tax Act, 1961. In view of the facts found by the Tribunal and the judgments noted above, we are of the view that the questions should be answered in the affirmative and in favour of the assessee.
6. There will be no order as to costs.
K.C. Agarwal, C.J.
7. I agree.