In this appeal, revenue has challenged action of Commissioner (Appeals) in respect of following grounds: " learned Commissioner (Appeals) has erred in law and on facts of t h e case in holding that assessee-firm is engaged in construction or manufacture or production of article or thing. He further erred in directing to allow investment allowance on cost of road roller used by assessee in construction of road. 2. On facts and in circumstances of case, learned Commissioner (Appeals) ought to have held that construction of road does not amount to manufacture or production of article or thing. 3. On facts and in circumstances of case, learned Commissioner (Appeals) ought to have held that assessee is not entitled to investment allowance in respect of road roller purchased by assessee for construction of road. " 2. assessee admittedly is firm of contractors. ITO in course o f assessment proceedings observed that assessee had claimed investment allowance of Rs. 60,082 in respect of road roller of value of Rs. 2,40,328. In support of claim, assessee contended: (1) that this was new machinery purchased for road construction project. (2) It was further claimed that business was of manufacture or production of any article or thing which in this case happened to be new road. (3) That all conditions prescribed for claim of investment allowance had been fulfilled. 3. ITO after examining case observed as follows: " tar and metal is poured on road and what road roller does is to level tar and metal which are placed on road. It is thus seen that road roller itself does not produce or manufacture any finished product, but it only moves on tar and metal placed on kachha road and thereby kachha road is converted into pakka road because of pressure brought by road roller. Road roller itself is thus not manufacturer or producer, but it only moves on road like other transport vehicle. only difference is that it gives pressure on road and it does not carry any goods or passengers. In my opinion, purchase of road roller does not entitle assessee to investment allowance because it does not manufacture or produce any article as envisaged under provisions of section 32A of Income-tax Act, 1961. claim of investment allowance is therefore rejected. " 4. Before Commissioner (Appeals), assessee sought to support claim by explaining process of road construction outlining various steps involved and material to be used. It was contended that both labour and machinery were used for road construction work. It was also submitted that items used in 'manufacture' of road were (1) hot mix plate, (2) paver finisher, and (3) road roller. It was further contended that following three tests laid down were also fulfilled: (1) That commodity was produced. (2) That process involved labour as well as machinery. (3) That end-product was different. 5. assessee supported his arguments with following authorities CIT v. M.R. Gopal [1965] 58 ITR 598 (Mad.), CIT v. Lakhtar Cotton Press Co. (P.) Ltd. [1983] 142 ITR 503 (Guj.) and Idandas v. Anant Ramchandra Phadke AIR 1982 SC 127. 6. learned Commissioner (Appeals) allowed claim of assessee as follows: " I have carefully considered ITO's arguments and submissions made by assessee's counsel. I have also considered various case laws, and test laid down by various Courts including Supreme Court. As stated by counsel raw materials used are different from end-product, Labour and machinery are employed. end-product is different than raw material used in process of manufacture of roads. In this view of matter, I am of view that assessee must succeed if Income-tax Officer is directed to allow investment allowance on road roller provided other conditions under section 32A(2)(b)(iii) are fulfilled. This ground of appeal is, therefore, taken to be section 32A(2)(b)(iii) are fulfilled. This ground of appeal is, therefore, taken to be allowed. " 7. revenue is in appeal against decision of Commissioner (Appeals). learned departmental representative has kly supported order of ITO. It was contended that road-making is not manufacturing activity. It was further submitted that end result was not thing or article which has any marketability. He referred to decision of Bombay High Court in case of CIT v. Shah Construction Co. Ltd. [1983] 142 ITR 696 in support of his arguments. 8. learned counsel for assessee, on other hand, supported decision of Commissioner (Appeals) and repeated arguments similar to ones as had been advanced before him. In addition to authorities cited before Commissioner (Appeals) he pressed into service following decisions: CIT v. Ajay Printery (P.) Ltd. [1965] 58 ITR 811 (Guj.), Progressive Engg. Co. v. ITO [1983] 3 ITD 172 (Hyd.), Nishit Synthetics (P.) Ltd. v. ITO [1984] 7 ITD 486 (Ahd.), Shri Raj Kumar Singh & Co. v. ITO [1986] 16 ITD 202 (All.) and First ITO v. Dr. P. Vittal Bhat [1983] 6 ITD 560 (Bang.) (SB). learned counsel also sought to distinguish decision in Shah Construction Co. Ltd.'s case and relied upon by departmental representative. 9. We have considered rival submissions and at outset we hold that decision in Shah Construction Co. Ltd.'s case was considering whether assessee-company was either wholly or mainly engaged in manufacture or processing of goods. This issue is not before us in assessee's case. decision in case of Lakhtar Cotton Press Co. (P.) Ltd. was on point of 'concessional rate of tax' applicable to company engaged in business of ginning and pressing of cotton which was held to be 'Processing activity'. In decisions in cases of Dr. P. Vittal Bhat and Nishit Synthetics (P.) Ltd., Tribunal was considering what constituted 'production of article' and what resulted in 'manufacturing activity'. decision in case of M.R. Gopal considered claim of assessee under section 15C of Indian Income- tax Act, 1922 ('the 1922 Act'). case of Ajay Printery (P.) Ltd. dealt with issue whether printing of balance sheets, etc., amounted to 'manufacture of goods' within meaning of section 23A of 1922 Act. In other words some of these decisions did not deal with section 32A of Income-tax Act, 1961 ('the Act') at all whereas some others dealt primarily with aspect whether particular type of activity was 'manufacture' or 'production' for purposes of section 32A. However, none of these decisions dealt with third activity referred to in section, namely, construction [section 32A(2)(b)(iii)]. This aspect has been, however, considered in case of Progressive Engg. Co. decision in that case was that assessee doing business as contractor would be entitled to investment allowance on its machinery used in construction of dam. It was held that word 'article' or 'thing' mentioned in section 32A(2)(b)(iii) need not be confined to movable property only. It was further held that addition of word 'thing' coupled with use of word 'construction' made assessee's eligibility to claim on account of investment allowance clearer. In case of Shri Raj Kumar Singh & Co. Tribunal allowed claim of investment allowance to assessee who was assisting main contractor engaged in construction of mine roads for purposes of quarrying, blasting, collecting, carriage and stocking of boulders and metal. 10. In both above decisions it may be noticed that assessees were carrying on composite activities of various types leading to main activity of construction of dam or road. In present appeal before us on other hand there is no finding by any of lower authorities as to whether such composite activities were carried on by assessee. There is no doubt that road has been constructed for which road roller has been used. There must have, however, been some other items of machinery with which assessee must have carried out processes of heating, mixing, spreading and levelling o f various ingredients such as tar, metal, gravel, sand, etc., on road before road roller actually went into action. Although there is reference in order of Commissioner (Appeals) to (1) plate, and (2) paver finisher, there is no finding as to whether these items of machinery were allowed investment allowance or whether in fact it was claimed or not. 11. According to us contractor who is engaged in construction of road is entitled to investment allowance in respect of plant and machinery (including road roller) used for such construction provided it carries on all (including road roller) used for such construction provided it carries on all composite activities prior to using road roller itself. We further hold that road is article or thing and that such article or thing is not prohibited by Eleventh Schedule to Act. We would accordingly direct ITO to examine whether road roller was used along with some other machineries engaged in composite activity of road construction. If so then assessee is entitled to succeed in its claim. This is view we have taken in preceding paras. We accordingly restore matter to file of ITO for this limited purpose. 12. As result, appeal of revenue is allowed for statistical purposes. *** INCOME TAX OFFICER v. N.K. PATEL AND COMPANY