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TMI Blog2015 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... to the tune of Rs. 8,58,60,045 on plant and machinery, on the ground that the appellant was not engaged in "manufacture or production of an article or thing" as required under Section 32(1)(iia) of the Income tax Act, 1961 ('the Act'). 2.1. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that production of concrete from bitumen and other components constituted "manufacture or production of any article or thing" in terms of clause (iia) of Section 32 of the Act. 2.2. That the Commissioner of Income-tax (Appeals) erred on facts and in law in not appreciating that the mere fact that mixed concrete was captively used by the appellant in construction of roads could not be the sole basis for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to the issue on disallowance of additional depreciation claimed by the assessee amounting to Rs. 8,58,60,045/-. The Assessing Officer disallowed the aforesaid claim for additional depreciation on the ground that the assessee was not engaged in 'manufacture or production of an article or thing' as required u/s 32(1)(iia) of the Act. As regard, the activity of production of bitumen concrete, the Assessing Officer held that the assessee was only mixing cement, sand, aggregate and admixture to form concrete, which activity according to the Assessing Officer could not be regarded as amounting to manufacture or production of any article or thing. 4. On further appeal, the CIT(A) confirmed the order of the Assessing Officer on this issue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Hon'ble Supreme court judgment in the case of N C Budhraja and other citations relied on by Id CIT(DR), assessee's arguments and grounds in this behalf are rejected. 28. Thus as the assessee cannot be held to be a producer of any article or thing, we are unable to accept the plea that to the extent of manufacturing of intermediate Bitumen mix, it may be treated as eligible for additional depreciation. In view of foregoings, on merits also the assessee's grounds are rejected. The facts of the present case are duly covered and identical with that of the case for Assessment Year 2004-05 wherein decision has already been taken by the Hon'ble ITAT. Therefore, respectfully following the decision of the Hon'ble ITAT, the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that such further deduction of fifteen per cent shall be allowed to- (A) a new industrial undertaking during any previous year in which such undertaking begins to manufacture or produce any article or thing on or after the 1st day 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-" Explanation.-For the purposes of this clause,- (1) "new industrial undertaking" means an undertaking which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d other citations relied on by Id CIT(DR), assessee's arguments and grounds in this behalf are rejected. 28. Thus as the assessee cannot be held to be a producer of any article or thing, we are unable to accept the plea that to the extent of manufacturing of intermediate Bitumen mix, it may be treated as eligible for additional depreciation. In view of fore goings, on merits also the assessee's grounds are rejected." 9. It has been brought to our notice that the above order of the Tribunal has been challenged before the Hon'ble High Court and the same is pending for adjudication. We find that the post amended provision of Section 32(1)(iia) clearly stipulate that there should be manufacture or production of article or thing. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's own case in A.Y. 2004-05. During the appellate proceedings the appellant has claimed that without prejudice to its claim for additional depreciation, it should be allowed depreciation on enhanced written down value of the asset as the Assessing Officer has allowed depreciation on the normal WDV as computed after reducing the amount of additional depreciation. The claim of the appellant has been considered. The appellant is in appeal against the order of Hon'ble ITAT, and has not accepted the order of the Hon'ble ITAT. In case the Issue is decided in favour of the appellant by the Hon'ble High Court, in that case the entire exercise of allowability of additional depreciation would be essential. The claim of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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