9911796707
TMI Blog2011 (5) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional depreciation U/s.32(1)(iia) of the Income Tax Act on the following grounds. a) The A.O. has failed to appreciate the fact, that the Embroidery machine which is subject matter of issue are being issued to do the embroidery work on the fabrics and thereby making the fabrics value added and marketable with new getup and designs and further the process is covered under the Technology Up-gradation Fund Scheme (TUF) framed by Ministry of Textile, Government of India for Small Scale Textile and Jute Industries to avail 15% Credit Linked Capital Subsidy (CLCS TUFs). b) The Plant Machinery (Embroidery Machine) is covered under the Technology Up-gradation fund, which is ment for Small Scale Industries. c) The unit is having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and eligible for additional depreciation under Section 32(1)(iia) of the Act. 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) of the I.T. Act, 1961 dated 15/10/2009 were that the assessee-firm is engaged in the business of embroidery work on jobwork basis. It was noted by the Assessing Officer that in addition to the normal depreciation the assessee has also claimed additional depreciation of ₹ 2,72,049/- on new machinery installed during the year under consideration. The assessee was issued a show-cause as to why additional depreciation be not disallowed. It was submitted that the embroidery machine is used to perform embroidery work on the fabrics and by the embroidery work the value of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embroidery design file; ii) Editing the design and/or combining it with other design (optional); iii) Load the final design file into the embroidery machine; iv) Stabilize the fabric and place it in the machine; v) Start and monitor the embroidery machine; And because of the above process which has to be carried out in very careful manner the output i.e. embroidered fabrics has entirely different looks and has different commercial value and thus, because of above operations new commodity emerges. The expressions 'manufacture' and 'produce' have not been defined in the Act at the relevant point of time but the dictionary meaning of manufacture is to transform or fashion new material into a changed form for us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enied. Section 32(1)(iia) also used the word 'production of any article or thing' and thus, the product with embroidery work is included in the work any article or thing. In fact the provisions of section 32(1)(iia) are larger in scope as compared to section 33(10(B)(b)(l)[sic] inasmuch as section 32(1)(iia) provides for additional depreciation on plant and machinery which is used in the production/manufacture of any article or thing whereas section 33(10(B)(b)(i)[sic] provides for development rebate on plant and machinery which is used in the construction, manufacture or production of any article or thing which is listed in the Fifth Schedule. In view of these facts and the decision of Hon'ble Supreme Court the additional depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, we allow the claim of the assessee. The issue of Revenue s appeal is dismissed. 4. On hearing the submissions of both the sides and on careful perusal of the order of the Respected Co-ordinate Bench, it is evident that the issue of additional depreciation on embroidery machine is squarely cove red, hence, judicial propriety requires one Bench of the Tribunal to follow the other Bench specially when the issue involved is identical on same facts. We hold accordingly, therefore, reverse the findings of the authorities below and direct to allow the claim. Grounds raised in this regard are allowed. 5. In the result, appeal of the Assessee is allowed. Order signed, dated and pronounced in the Court on 27/ 5 /2011. - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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