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TMI Blog2015 (11) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... here cannot be universal preposition of law that computers are used only in offices and not for manufacturing activities. The insistence of the Assessing Officer that the same should therefore be treated as office appliance cannot be countenanced. Perhaps if it was shown that the computers formed part of the integrated manufacturing process, his stand that the same would form part of the plant and machinery may have some basis. In the present case, no such material was available on record. It is not as if that in factory premises, computers cannot be installed for direct use in manufacturing activity; thereby forming part of machinery used in such activity. There may be number of ways in which installation of a computer may enhance and improve the efficiency. There is nothing on record to suggest that the computers were part of the plant and machinery. Whether if the computers were the part of the machinery and plant eligible for additional depreciation u/s 32(1) (iia) of the Act, then allowable depreciation on computers would be 15% instead of 60% as claimed by the assessee? - Held that:- In the present case, it is noted that the assessee is engaged in the business of producing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Appeal No.942 of 2013 formulated the following questions: A. Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in law in considering the 'toners' as 'gas cylinders' and accordingly directing the Assessing Officer to allow depreciation @ 60% in Chlorine toners instead of 15% applicable to plant and machinery of Caustic Chlorine Plant? B(i) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT was correct in deleting the disallowance of additional depreciation of ₹ 32,29,051/- on computers installed in the factory premises, without appreciating that the computers are office appliances only whether installed in factory or office? B(ii) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT has erred in not appreciating the facts that if the computers were the part of the machinery and plant eligible for additional depreciation u/s 32(1) (iia) of the Act, then allowable depreciation on computers would be 15% instead of 60% as claimed by the assessee? Grounds raised in this appeal are as under: 1. On the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in [2008] 296 ITR 72 (Delhi), where it was observed that if we interpret the expression gas cylinder to mean cooking gas cylinder , we will be really adding words to the statute which is not permissible. . Relying on the said decision of the Delhi High Court in the case of Commissioner of Income-Tax vs. Goyal MG Gases Ltd. (supra), the Division Bench of Madras High Court in the case of Commissioner of Income-Tax vs. Chemplast Sanmar Ltd. reported in [2008] 296 ITR 81 (Mad), held that chlorine toners are gas cylinders, It was held as under:- 8. The above view of ours is also supported by the decision of the Delhi High Court in CIT v. Goyal MG Gases Ltd. [2008] 296 ITR 72, which the Appellate Tribunal has relied upon. In the case before the Delhi High Court, the contention of the assessee therein was that the containers/tankers were nothing but big cylinders as they had all the attributes of a cylinder, which was rejected by the Revenue on the ground that since the so-called cylinders were merely containers and were mounted on trucks, the assessee therein was entitled to depreciation at the rate of 25 per cent as eligible to plant and machinery , While deciding the issue w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(Appeals) was confirmed in following terms:- 50. We have heard both the parties in our opinion, the Ld CIT(A) has correctly analyzed the facts and decided the issue in the light of applicable law. It cannot be said as a universal proposition of law that computers are always used only in offices and not for manufacturing activities. The finding of fact recorded by the Ld.CIT (A) has not been rebutted before us. We are in agreement with the view taken by the Ld.CIT(A) in this regard. His order in this behalf therefore confirmed. Ground NO. 2 taken by the Department is dismissed. 11. We cannot find any fault with the observations of the Tribunal while confirming the view of CIT(Appeals)that there cannot be universal preposition of law that computers are used only in offices and not for manufacturing activities. The insistence of the Assessing Officer that the same should therefore be treated as office appliance cannot be countenanced. Perhaps if it was shown that the computers formed part of the integrated manufacturing process, his stand that the same would form part of the plant and machinery may have some basis. In the present case, no such material was available o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed date during F.Y. 2007-08. On being asked, appellant informed that it had claimed depreciation on wind electric generator under clause (ii) of section 32(1) and not clause (i) or section 32(1). Appellant filed copy of computation of income and depreciation chart in this regard. Additional depreciation @ 20% of the actual cost of such wind electric generator would be admissible under clause (ii) of section 32(1), since appellant had claimed normal depreciation on wind electric generator under clause (ii) of section 32(1) and not clause (i) of section 32(1) by exercising option in this regard under Rule 5(1A) of IT. Rules. Denial of additional depreciation by the A.O. for this reason is, therefore not tenable. Assessing Officer's other reason for denying additional depreciation on wind electric generator was that additional depreciation was admissible to assessee engaged in production or manufacture of article or thing, whereas generation and distribution of power does not result into production or manufacture of article or thing . As held in the case of CIT vs VTM Ltd. (2010) 187 Taxman 319 (Mad), section 32(1)(iia) does not impose any condition of operational connectivity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y wind mills for its own consumption and it is not the business of the assessee. Therefore, the assesses is not entitled for additional depreciation on wind mills, under section 32(1)(iia). On appeal, the Commissioner of Income-tax (Appeals) has allowed the claim of the assessee on the ground that it is not essential that the assessee is in the business of generation of electricity. But, since the assessee is generating the electricity by windmills, the conditions of the law are fulfilled for claiming additional depreciation. It is an undisputed fact that after the addition of two units during the period relevant to the assessment year, the capacity of generation of power through wind mills was enhanced by 50 per cent. In our view, when the Central Board of Direct Taxes in its circular has explained the position of captive power unit as well as the generation and generation and distribution of power unit on same footings, then we find no merit in the appeal of the Revenue on this issue. Accordingly, we decide this issue against the Revenue. The order of the Commissioner of Income-tax (Appeals) is upheld on this issue. It is also brought to our notice that the said decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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