The central legal point established in the judgment is the interpretation of 'industrial undertaking' in the context of construction work and its application to the entitlement of investment allowance under section 32A of the Income Tax Act.

M.P. Chandrakantaraj Urs, J.—The above I.T.R.C.s are consolidated together and disposed of by the following common order as the question referred to us for answer by the Tribunal either at the instance of the assessing authority or at the instance of Revenue are the same. Before setting out the questions referred to us, we briefly state that the assessee in I.T.R.C. Nos. 138 and 139 of 1985 is M/s. Shanker Construction Co., Bangalore. A registered firm carrying on business in manufacture and sale of tiles and construction work on a somewhat large scale specialising in constriction of dams and channels. Similarly, the assessee in I.T. R.C. Nos. 217 and 218 of 1985 is M/s. Shanakaranarayana Construction Co., Bangalore. The assessee in the case of I.T.R.C. Nos. 27 of 1986 is Naveen Mechanised Construction Co., (P.) Ltd., Hubli.

2. In the first four cases, the assessee for thi relevant assessment years, viz., 1978-79 and 1979-80, claimed allowance at the rate of 25% of the value invested by them in plant and machinery employed in the execution of their construction work at the sitter of the construction which came to be disallowed by the assessing authority. On appeal to the Commissioner of Income Tax (Appeals)-I, Bangalore, the appeal came to be allowed on the ground that the assesses-firm carrying on business activities were in the nature of an "industrial undertaking" and as such was entitled to the benefit of the ruling of the High Court of Orissa in the case of Commissioner of Income Tax Vs. N.C. Budharaja and Company, (1980) 121 ITR 212 Orissa . As well as in the case of Commissioner of Income Tax, Bombay City-II Vs. Pressure Pilling Co. (India) P. Ltd., (1980) 126 ITR 333 Bom (decided by the Orissa High Court and the High Court of Judicature, Bombay, respectively). The Revenue went up in appeal to the Income Tax Appellate Tribunal, Bangalore Bench, against those orders of the Commissioner of Income Tax (Appeals). The Tribunal. By its order, following the ruling of the Special Bench of the Tribunal rendered earlier, came to the conclusion that the two decisions of the High Courts relied upon by the Commissioner (Appeals) were decided on other provisions of the Income Tax Act, then section 32A of the Income Tax Act ("the Act" for short). They have referred to the ruling of the Special Bench that the company engaged in the Construction of dams and channels could not be held to be an industrial undertaking and, therefore, the Commissioner was in error in permitting allowance under subclass (i) of clause (b) of sub-section (2) of section 32A of the Act.

3. In the last of the cases, viz., I.T.R.C. No. 27 of 1986, M/s. Naveen Mechanised Construction Co., (P.) Ltd., the claim was disallowed by the assessing authority. But, on appeal, filed, it was given allowance under the very same provision. On appeal by the Revenue, the appellate order was confirmed by the Tribunal following the same decision. In that circumstances, the question which has been set out hereafter has been referred for our answer in all these cases :

The questions as follows :

"Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in upholding the disallowance of investment allowance ?"

4. The question as formulated, we feel, is not correct. Therefore, we reformulated the question under the circumstances and the facts of the case as follows :

"Whether, on the facts and in the circumstances of the case, the allowance provided for under sub-clause (iii) of clause (b) of sub-section (2) of section 32A of the Act will ensure to the benefit of the assessee ?"

5. Sub-section (2) of section 32A of the Act, relevant for our purpose and applicable to the relevant assessment years in questions, reads as follows :

"32A. Investment allowance-. . .

(2) The ship or aircraft or machinery or plant referred to in sub-section (1) shall be the following namely :-

(a) a new ship or new aircraft acquired after the 31st day of March, 1976,