JUDGMENT R.K. Agrawal, J.
1. The Tribunal, Allahabad Bench, Allahabad, has referred the following five questions of law under Section 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act"), for opinion to this Court:
1. Whether there was material justifying Tribunal's finding that there was a corresponding liability in respect of accretion in contingency account No. II amounting to Rs. 7,10,824?
2. Whether the Tribunal was justified in law in holding that the accretion in contingency account No. II could not be brought to tax as trading receipt in spite of the fact that the actual sales-tax liability in respect of completed transactions had been duly provided for by transfer from the aforesaid amount?
3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the sale of vehicles under the hire-purchase agreement is concluded only when the terms of agreement are fully complied with by the hirer or option to purchase is exercised?
4. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the entire dealer's margin or profit under the hire-purchase agreement did not accrue to the assessee on the execution of agreement by the hirer?
5. Whether in law and circumstances of the case, the Tribunal was justified in confirming the CIT(A)'s order wherein it. was held that computer does 'manufacture or produce' within the meaning of Section 32A of the Act and hence is entitled for investment allowance?
2. The reference relates to the asst. yr. 1983-84.
3. Briefly stated, the facts giving rise to the present reference are as follows:
The assessee is a limited company and deals in vehicles and financing of vehicles on hire-purchase basis. The assessee is also doing job work in its workshop. The AO added to the total income of the assessee a sum of Rs. 7,10,824 which was found credited in the contingency account No. II as sales-tax realised from the customers on cases finalised by it during the period relevant to the assessment year in question. Similarly, an addition of Rs. 1,20,710 towards the contingency account No. IV representing dealer's margin on sales of vehicles on hire-purchase basis was also made by the AO. Being aggrieved, the assessee preferred appeal before the CIT(A) who deleted both the additions relying on the earlier decision of the Tribunal in the assessee's own case for the asst. yrs. 1981-82 and 1982-83. The Department appealed to the Tribunal, which was dismissed.
Another issue related to the claim of investment allowance on computer under Section 32A of the Act @ 25 per cent on Rs. 4,24,567 being the value of the computer installed in the office premises of the assessee. The AO declined to allow the said claim amounting to Rs. 1.06,142 as, according to him, it was an office appliance and did not fall under the provisions of Section 32A(b)(ii) of the Act as it was not used for the purpose of manufacture or production of any article or thing and mainly was used for its own office work. Aggrieved, the assessee appealed to the CIT(A) who allowed the assessee's claim holding that the assessee was entitled to the investment allowance claimed by it as he was also doing the job work in its workshop and the computer was also used for the said work. The Revenue, being aggrieved, appealed to the Tribunal, which upheld the decision of the CIT(A) and dismissed the appeal filed by the Revenue.
4. We have heard Sri R.K. Upadhyaya, learned standing counsel for the Revenue, and Sri R.S. Agrawal, learned Counsel appearing for the assessee.
5. So far as the question Nos. 1, 2 and 3 are concerned, we find that this Court in the case of this very assessee reported in CIT v. Motor & General Sales (P) Ltd. has held that the amounts collected by the assessee from the hire-purchaser as sales-tax were not really sales-tax at all because the sale at that time had not taken place and the sales-tax is payable when the sale takes place and in the case of hire-purchase, sale takes place only at the time mentioned in the hire-purchase agreement or at the option of the hirer, if so provided in the agreement. Hence, there was no sales-tax liability on the assessee at all when he collected the. amount from the hire-purchaser and, therefore, the amount in contingency account No. II has to be treated as income of the assessee in the assessment year in which he made the collection. This Court had answered the aforementioned two questions in the negative, i.e., in favour of the Revenue and against the assessee.
6. Respectfully following the aforesaid decision, we answer the question Nos. 1, 2 and 3 in the negative, i.e., in favour of the Revenue and against the assessee.
7. So far as question No. 4 is concerned, as the sale under the hire-purchase agreement takes place only at the time mentioned in the agreement or at the option of the hirer, if so provided in the agreement, the dealer's margin or profit under the hire-purchase agreement did not accrue to the assessee on the execution of the agreement by the hirer. Thus, the question No. 4 is to be answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
8. So far as the question No. 5 is concerned, we find that this Court in IT Ref. No. 17 of 1991, CIT v. Radha Machinery Export, connected with IT Ref. No. 251 of 1992, decided on 30th Sept., 2005, has held that the investment allowance under Section 32A of the Act was admissible.
We accordingly answer the question No. 5 referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. There shall be no order as to costs.