Revenue and assessee have preferred appeal and cross objection, respectively against order dt. 16th Oct., 1985 of Shri J.S. Gill, AAC of IT Amritsar Range, Amritsar, who allowed appeal, against order dt. 30th Nov., 1984 of Shri A.P. Kackria, ITO distt. I (x) Amritsar. We are disposing of cross matters on consolidating these together and thereby passing consolidated order for sake of convenience since appeal and cross objection are arising out of impugned consolidated order. Moreover, issue raised in inter-connected, so much so that contention and submissions of parties are also common. relevant facts, in brief, are that assessee as registered firm. assessment year involved is 1984-85, previous year of which is ending 30th Sept., 1983. business of assessee is that of hotel. assessee filed return of income for assessment under consideration and made claim inter-alia for investment allowance on plant and machinery used in business of assessee under s. 32A of IT Act, 1961 (here-in-after referred to as Act). ITO did not allow claim of assessee for reasons mentioned in his order inter alia that investment allowance claimed by assessee on Airconditioning plant is not admissible. On appeal, AAC allowed it for reasons mentioned in his order inter- alia that under s. 32A(1), investment allowance is admissible in respect of machinery or plant which is owned by assessee and is wholly used for purpose of business carried on by him, that it is no denying fact that Hotel is industry and machinery or plant installed for purpose of hotel business is entitled to investment allowance. Thus, for reasons mentioned above and in para No. 4, AAC allowed are claim of assessee. revenue being aggrieved has preferred this appeal, while assessee cross-objection to support order of AAC. Shri Suman, ld. DR contends that assessee is not industrial undertaking or small scale industrial undertaking, moreover, assessee is not manufacturing or producing article or thing. He further contends that it is for assessee to satisfy conditions precedent which are there under s. 32A (2) (b), r/w its explanation, which says that for entitlement of investment allowance, assessee is to be small scale industrial under-taking or industrial under-taking and to prove that it manufactures or produces article or thing not in this case, assessee has not satisfied these conditions, therefore, claim is not to be allowed. Reliance is placed on decision of Hon'ble Madras High Court in case of CIT (Central), Madras vs. Buhari Sons Pvt. Ltd. (1983) 144 ITR 12 (Mad) and Hon'ble Kerala High Court in case CIT vs. Casino Pvt. Ltd. (1973) 91 ITR 289 (Ker) as well as on decision of Tribunal, Madras Bench 'C' Madras in case Kanakadhara Industries vs. Third ITO, (1984) 19 TTJ (Mad) 411: (1984) 7 ITD 142 (Mad). On other hand, Shri P.N. Arora, ld. counsel for assessee relies on order of AAC and on decisions of Hon'ble Madras High Court in case CIT, Tamil Nadu III vs. Engine Valves Ltd. (1980) 19 CTR (Mad) 274: (1980) 126 ITR 347 (Mad) and Hon'ble Delhi High Court in case Punjab National Bank Ltd. vs. CIT, Delhi I, (1983) 141 ITR 886 (Del). He further contends that it is nowhere disputed by ITO that assessee is not industrial undertaking or small scale industrial undertaking as he has allowed investment allowance, depreciation development on plant and machinery except air-conditioner. In rebuttal, Shri Suman, contends that it is for assessee to satisfy conditions laid down in s. 32A, mentioned above if these are not satisfied then Tribunal is to see these and it should not assume these to have been satisfied if ITO has not so held. He further contends that when ITO has rejected claims of assessee then it is to be taken that it is there on account of non fulfilling conditions laid down under s. 32 of Act. We have heard rival contentions and gone through record before us. In case CIT (Central), Madras vs. Buhari Sons Pvt. Ltd. (1983) 144 ITR 12 (Mad) their Lord-ships of Hon'ble Madras High Court held as under: "It is well established that in absence of any definition in statute, words occurring in statute will have to be understood with reference to objects of Act and in context in which they occur. Consequently definitions given for words in one statute cannot automatically be imported for interpreting same words in another statute. interpretation of expression "Manufacturing process" for purposes of Factories Act, 1948, will not be relevant in construing same expression for purposes of Finance Act, 1966. preparation of eatables cannot be taken to be manufacture of goods. words "goods" used in s. 2(7) (d) of Finance Act, 1966 has been used in sense of merchandise, i.e. articles for sale, and so understood in commercial sense, expression, "goods" will not include eatables prepared in hotel. Further, expression "manufacture" does not connote trading activity and activity carried on in hotel can only be taken to be trading activity and not manufacturing activity." Their Lordships of Hon'ble High Court in deciding case mentioned above, have applied in decision of Hon'ble Kerala High Court in case CIT vs. Casino (Pvt.) Ltd. (1973) 91 ITR 289 (Ker) wherein their Lordships of Hon'ble Kerala High Court has taken view that expression "manufacture of goods" referred only to activity of manufacturing concern and not activity of trader. Their Lordships of Hon'ble Madras High Court has distinguished case New Taj Mahal Cafe Ltd. vs. Inspector of Factories, AIR 1956 Mad 600, holding therein that "Manufacturing process" occurring in s. 2(k) of Factories Act cannot be of much assistance to assessee. Thus from decision of Hon'ble Madras High Court and Kerala High Court, mentioned above, it is clear to us that manufacture of eatables cannot be taken to be manufacture of goods and business of running hotel is activity of trade. When this is so, then assessee cannot be said to be either n industrial under-taking or small scale industrial undertaking, which manufactures or produces article or thing. In case, Vimal Textile Finishing Mills P. Ltd. vs. ITO & Anr. (1985) 45 CTR (P&H) 263 (FB): (1985) 152 ITR 429 (P&H), their Lordships of Hon'ble Punjab and Haryana High Court, held that case decided on same issue under other Acts, then IT Act, such cases have no bearing and it would be wrong and dangerous to import consideration of entries in first schedule to Industries Act, things which are germane to consideration of entirely different statute, especially when purpose and object of legislature are also different, than further necessity of making reference arose as doubt was expressed by referring Bench on correctness of judgment of Court in East India Cotton Manufacturing Co. Pvt, Ltd. vs. Assessing Authority- cum-Excise and Taxation Officer (1972) 30 STC 489, but that question again does not arise as judgment in East India Cotton Manufacturing Company Pvt. Ltd.'s case was under Sales-tax Act, which has no bearing so far as case in hand is concerned. In case Kanakadhara Industries vs. Third ITO (1984) 19 TTJ (Mad) 411: (1984) 7 ITD 142 (Mad) Madras Bench 'C' of Tribunal, has taken view that decision under other Acts on identical issue has no bearing on issue to be decided under IT Act. In case of South Bihar Sugar Mills Ltd. vs. Union of India AIR 1963 SC 922, their Lordships defined or described word 'manufacture' that 'manufacture' implies change. But every change in raw material is not manufacture. There must be such transformation that new different article must emerge having distinctive name, character or use. Similarly in case CST vs. Dr. Sukh Deo AIR 1969 SC 499, their Lordships held that word 'manufacture' in ordinary acceptation has wide connotation, it means making of article or materials commercially different from basic components by physical labour or mechanical process. cases relied upon by counsel for assessee, Shri Arora, and mentioned above, are not, under IT Act as these are there under sale tax Act, being admitted position. Therefore, we hold that these cases cannot be considered. Particularly when there are direct decisions of Hon'ble Madras and Kerala High Courts, on issue involved in this matters. Therefore, following with respect, decisions of Hon'ble Madras and Kerala High Court mentioned above, we hold that hotel business is trading activity of assessee and as such, assessee is neither industrial undertaking nor small scale industrial undertaking, which manufactures or produces article or thing. Therefore, assessee is not entitled to investment allowance on plant and machinery, used by assessee in previous year relevant for assessment year under consideration for running business. Moreover, assessee has not satisfied conditions precedent, laid down under s. 32A(b)(ii) and (iii) r/w its explanation (2), which is here-in-after reproduced for ready reference, "(2) ship or aircraft or machinery or plant referred to in sub-s. (1) shall be following namely (b) any new machinery or plant installed after 31st March, 1976, (ii) in small scale industrial undertaking for purposes of business of manufacture or production of any article or thing, or (iii) in any other industrial undertaking for purposes of business of construction, manufacture or production of any article or thing, not being article or thing specified in list in Eleventh Schedule. Expln. (2) industrial undertaking shall be deemed to be small-scale industrial undertaking if aggregate value of machinery and plant (other than tools, jigs, dies and moulds) installed as on last day of previous year, for purposes of business of undertaking does not exceed (i) in case where previous year made before 1st Aug., 1980, ten lakh rupees, and (ii) in case where previous year ends after 31st July, 1980, twenty lakh rupees. and for this purpose value of any machinery or plant shall be (a) in case of any machinery or plant owned by assessee, actual cost thereof to assessee, and (b) in case of any machinery or plant hired by assessee, actual cost thereof as in case of owner of such machinery or plant." claim of assessee cannot be allowed on ground that ITO h s allowed claim of assessee on plant and machinery except airconditioned and, therefore, claim of assessee is to be allowed in respect of this item. Hence, we reject claim of assessee and thereby set- aside order of AAC on issue and restore that of ITO. Shri Arora, counsel for assessee has stated that cross-objection of assessee is there to support impugned order, which we have already set-aside being erroneous in law and facts and as such, cross-objection of assessee has become infructuous. In result, appeal of Revenue is allowed, while cross- objection of assessee is dismissed. *** INCOME TAX OFFICER v. HOTEL BLUE MOON