P. VENKATA RAMA REDDI, J.

( 1 ) IN this application filed under section 256 (2) of the Income-tax Act, 1961, the Revenue seeks reference of the following two questions for the decision of this court :"1. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in allowing the amount of Rs. 2,53,700 incurred towards boarding, lodging and education of the 32 orphans adopted by the assessee-company as a business expenditure ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessee is entitled to investment allowance of Rs. 2,24,52,331 on the new plant and machinery installed in the assessee s business of extracting coal ?"

( 2 ) WE are of the view that the first question raises a debatable point of law. No doubt, there is a finding of the Tribunal that the expenditure incurred for the lodging, boarding and education of 32 orphans pursuant to the appeal made by the State Government, as a measure of cyclone relief, is connected with the business expenditure inasmuch as those orphans were imparted training and absorbed in the service of the company. But it is to be noted that an activity undertaken purely as a philanthropic measure which has no connection with the company s business activity as such, cannot be treated as business expenditure. But, at the same time, if the activity undertaken by the assessee-company in rehabilitating the orphan children with a view to eventually absorb them into the company s service is not only a philanthropic act but also prompted by considerations of business or business expediency, the findings of the Tribunal can be justified. But prima facie, from the discussion of the Tribunal it is not clear as to whether the assessee-company was promoted by a business motive in adopting the orphans. The Tribunal surmised that if the expenditure incurred for the training imparted to them is a business expenditure, meeting the expenditure for their boarding and lodging prior to such training is also to be considered to be an expenditure meant for the purpose of getting prospective coal miners. Whether or not this approach of the Tribunal is correct and whether there is material at all for the Tribunal to reach a conclusion that the incurring of expenditure for boarding, lodging and education of orphans was not only conceived as a philanthropic has to be drawn from the proved facts, is an arguable question of law to be decided.

( 3 ) AS far as the second position is concerned, we are unable to find a debatable of law fit to be referred for the consideration of this court. One of the conditions to be satisfied for allowing deduction by way of investment allowance under section 32a is that new machinery or plant should have been installed in an industrial undertaking"for the purposes of business of construction, manufacture or production of any article or thing, not being an article or thing specified in the list in the Eleventh Schedule". The contention advanced on behalf the Revenue is that winning or excavating the coal from the mine does not involve production of an article or thing. Learned standing counsel contends that the Tribunal has followed the decision of this court in CIT v. Super Drillers [1988] 174 ITR 640, wherein the Division Bench of this court held that drilling operations resulted in the production of an article or thing, i. e. , underground water within the meaning of section 32a (2) (b) (iii) and a similar view taken by the Karnataka High Court was reversed by the Supreme Court in CIT v. N. C. Budharaja and Co. [1993] 204 ITR 412. In that case, the Supreme Court held that the activity of construction of a dam, bridge, building or road does not amount to production of an article or thing. The Supreme Court mainly relied ion the legislative history of the provision for the purpose of understanding the meaning of the words "articles and things" occurring in section 32a (2) and pointed out that th

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