1. Investment allowance under Section 32A of the Income-tax Act, 1961 ('the Act'), on phototypesetter and air-conditioner installed by the assessee-company in the year under assessment (1980-81) was disallowed by the ITO on the ground that the same were installed in the office premises of the assessee. The ITO thereby relied upon Clause (a) of the proviso to Section 32A(1). The Commissioner (Appeals) allowed the claim holding that they were the assets of the industrial undertaking for the purpose of business of production. Secondly, the ITO negatived the claim of deduction of the assessee for Rs. 3,501 under Section 80VV of the Act. The Commissioner (Appeals) allowed the claim on the ground that it was below Rs. 5,000. The department is, therefore, in appeal on both the points which we proceed to dispose of in seriatim.
2. Contention of the learned departmental representative is that the said phototypesetter and air-conditioner having been installed in the office premises were not eligible for investment allowance in view of Clause (a) of the proviso to Section 32A(1). Contention of the learned representative for the assessee on the other hand, is that the said machinery has been installed for the purpose of production and is, as such, part of an industrial undertaking. According to him, there being no other suitable place for installation of the said machinery, the same has been installed in a part of the office premises.
3. It is obvious from the plain reading of Clause (a) of the proviso to Section 32A(1) that no deduction on account of investment allowance is allowed in respect of any machinery installed in any office premises.
There is no dispute that the said phototypesetter and the air-conditioner are the composite part of the same plant, i.e., to say the air-conditioner is necessary for efficient working of the phototypesetter which is highly sophisticated machine and is required to be operated in a dust-free and air-conditioned atmosphere. Now it is to be seen as to what is the meaning of 'office premises' used in the said Clause (a). Meaning of the words 'office premises' should be taken as they are understood in common parlance with reference to the use of a particular premises. Any premises or part thereof initially used for office, residence, guest house or industry may be converted from one use to the other and the Act places no restriction for such conversion.
A portion in the premises of industry or factory may be used for the office purposes and even for residential purposes. Thus, the meaning and import of the words 'office premises' used in Clause (a) should be taken with reference to the use to which a particular premises or portion thereof has been put. No sooner, phototypesetter was installed in a portion of the office premises the said portion no more remained office premises and, therefore, the said machinery could not be made exception to the investment allowance. Meaning of the words, used in a statute should be construed with reference to the context. In the words of the Hon'ble Mr. Justice Shah "It is a settled rule of interpretation that, in arriving at the true meaning of any particular phrase in a statute, the phrase is not to be viewed isolated from its context ; it must be viewed in its whole context, the title, the preamble and all the other enacting parts of the statute." Vide CET v. Darshan Surendra Parekh [1968] 69 ITR 683 (SC).
4. Thus, the portion of the office premises where the machinery has been installed for industrial purpose was no more office premises and, therefore, the said machinery cannot be made exception to the investment allowance. Order of the Commissioner (Appeals) is, therefore, confirmed on this point.
5. While disposing of the second point it appears that the learned Commissioner (Appeals) overlooked the provisions of Sections 80A(2) and 80B(5) of the Act. Admittedly, the total income of the assessee was nil. The assessee was, therefore, not entitled to deduction of Rs. 3,501 under Section 80VV. Order of the Commissioner (Appeals) is, therefore, reversed on this point and that of the ITO is maintained.
Consequently, Rs. 3,501 stand disallowed.