9911796707
TMI Blog2012 (12) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... t:- Following the decision in case of Parry Agro Industries Ltd. (2006 (5) TMI 63 - KERALA HIGH COURT) that non-production of audit report can only be considered as procedural lapse and assessee having cured the lapse before completion of assessment, a disallowance could not be made for this reason. Issue decides in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by 40 numbers resulting in capacity of such division getting increased by 83.33%. According to assessee, the term "undertaking" could not be understood in such a limited manner that installed capacity had to be considered for the whole of the company. As per the assessee, Weaving Unit was having independent functioning and could survive independently. The word "undertaking" could not be equated with a legal entity. Just because the Head Office costs were allocated to Weaving Unit, it could not be stated that it was not a separate undertaking having independent existence. Further, as per the assessee, the Assessing Officer had considered the number of machines as a criteria and made a mistake because, type of machines used in different divisions were entirely different and not at all comparable. 4. CIT(Appeals) was appreciative of the contentions of the assessee. According to him, decision of Hon'ble Kerala High Court in the case of Parry Agro Industries Ltd. (supra) was clear in that a procedural lapse like filing of audit report belatedly would not negate the claim itself. According to him, the Weaving Unit of the assessee was a separate undertaking and had separate existence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of April, 2002; or (B) any industrial undertaking existing before the 1st day of April, 2002, during any previous year in which it achieves the substantial expansion by way of increase in installed capacity by not less than ten per cent; Provided further that no deduction shall be allowed in respect of- (a) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (b) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest house; or (c) any office appliances or road transport vehicles; or (d) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head "Profits and gains of business or profession" of any previous year; Provided also that no deduction shall be allowed under clause (A) or, as the case may be, clause (B), of the first proviso unless the assessee furnishes the details of machinery or plant and increase in the installed capacity of production in such form, as may be prescribed along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Combing Department, for manufacturing combed yarn. After the carding operation, the impurities present in the silver will be removed in the Combing Department. That silver which is produced in the combing Department will pass through the draw frames used in the drawing Department in order to obtain parallel fibers. These parallel fibers go through speed frames in the Roving Department in order to covert the silver into thinner forms called as roves which roves are thereafter sent to the Spinning Department. In the Spinning Department we have what is called as the ring frames (machines) which are used to spin the roves received from the Roving Department. The ring frames are machines, which are equipped with cleaners, removes the accumulated dirt. The ring frames play an important role in producing quality yarn. Thereafter, the yarn obtained from the Spinning Department goes to the winding Department. In the finding Department we have autoconers in order to produce fault-free yarn. 10. From the above facts, it is clear that blow room, carding, combing, drawing, roving, spinning and winding are different Departments/divisions in a textile mill. In each Department/division there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereby raw material is fed on one end and the finished product comes out at the other end without intervention in between. For example, in the case of continuous casting machine in the steel industry we have one continuous integrated process under which scrap (raw material) is put in and what comes out is steel or iron or aluminium. Another example, in the case of "pasteurization plant" we have three chambers and ducts. In the first milk is collected, in the second it is heated and in the third it is cooled. Duct carries hot and cold water. The raw material is raw milk, the end product is the pasteurized milk. In the heat chamber there is the heater. In the cooling chamber we have cooling plant which has a concept similar to air-condition plant. Such a process is one integrated process. Therefore, the Tribunal and the High Court erred in holding that the manufacturing process in the textile mill is one continuous integrated process." 8. It is clear from the above observations of their Lordship which succinctly summarises the processes undertaken by a textile mill, that a textile mill cannot be compared with a manufacturing unit which was having an integrated process of productio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
