Investment allowance under Section 32A of the Income-tax Act, 1961, is not admissible in respect of new canteen equipments purchased and used during the relevant previous year.

Ajit K. Sengupta, J.

1. THIS reference under Section 256(1) of the Income-tax Act, 1961, relates to the assessment year 1979-80. The following questions of law have been referred to this court at the instance of the assessee :

"1. Whether the Tribunal was right in holding that the commission payment to the directors and other senior management staff were required to be considered for the purposes of Section 40(c) and Section 40A(5) of the Income-tax Act, 1961 ?

2. WHETHER the Tribunal was right in holding that the liability to tax under the Companies (Profits) Surtax Act, 1964, was not an admissible deduction in computing the assessee's income under the head 'Profits and gains of business or profession' ?

Whether the Tribunal was right in holding that investment allowance under Section 32A of the Act is not admissible in respect of new canteen equipments purchased and used during the relevant previous year ?

3. WHETHER the Tribunal was right in holding that the provision of Rs. 65,76,148 representing differential excise duty and consequent increase in sales tax which would be payable in the event of the Excise Department succeeding in its claim that the excise duty payable by the manufacturers was to be computed with reference to the assessee's selling price and not with reference to the price at which the manufacturers sold their goods to the assessee was not allowable as deduction ?"

2. The following question has been referred at the instance of the Department :

"WHETHER, on the facts and in the circumstances of the case and having regard to the provisions of Section 36(1)(iv) read with the I.T. Rules 87 and 88 and the Board's Notification No. S.O. 3433 dated 21-10-1965, the Tribunal was correct in law in allowing the assessee's appeal holding that the assessee is entitled to the entire amount of Rs. 50,79,655 being the initial contribution made to the approved superannuation fund as a deduction as against Rs. 8,12,745 allowed by the Income-tax Officer ?"

3. A few of the questions are admittedly concluded by the decision of the Supreme Court or of this court as the case may be and we do not propose to deal in detail with the facts relating to such questions.

4. It is not in dispute that the first question in the reference at the instance of the assessee is concluded by the decision of the Supreme Court in the case of Gestetner Duplicators P. Ltd v. CIT [1979] 117 ITR 1. Following the said decision, we answer the first question in this reference in the affirmative and in favour of the Revenue.

4. THE second question at the instance of the assessee is concluded by the decision of this court in the case of Molins of India Ltd. v. CIT [1983] 144 ITR 317. Following the said decision, we answer the second question in the affirmative and in favour of the Revenue.

The only question at the instance of the Department is concluded by the decision in I. T. Reference No. 113 of 1985, CIT v. Union Carbide India Ltd., where the judgment was delivered on February 5, 1990. Following the said decision, we answer the said question in the affirmative and in favour of the assessee.

5. WE shall now deal with the two other questions referred at the instance of the assessee.

6. THE facts relating to the third question are that the assessee claimed investment allowance under Section 32A of the Income-tax Act, 1961, in respect of new canteen equipment purchased and used by the assessee during the relevant previous year. The Income-tax Officer negatived the claim of the assessee which, on appeal, was upheld by the Commissioner of Income-tax (Appeals). The assessee preferred an appeal before the Tribunal. The Tribunal, after hearing both the parties, concluded the matter as hereunder :

The finding given by the Commissioner of Income-tax (Appeals) on this issue and the argument of Sri Pal, the Departmental Representative, are correct. The investment allowance can be granted provided the assessee fulfils the conditions laid down in Section 32A of the