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TMI Blog2015 (12) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... wise processed.' If the machinery or plant is required to be utilized in the production of such textiles, at whatever sage, the assessee is entitled to the benefit of the development rebate. It is not disputed fairly that if the assessee had been producing the embroidered cloth starting from scratch, that is, by starting with cotton, this machinery would have been entitled to be considered for the purposes of such development rebate. We are of the view that it makes no difference that in the particular case, the assessee buys the cloth and then processes it, using the machinery, by embroidering it and, in some cases, by dyeing it. The assessee utilizes the machinery in the production of processed textiles. Therefore, the machinery is entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961, hereinafter referred to as the Act was framed vide order dated 29.10.2010. While framing assessment Assessing Officer made disallowance of claim of additional depreciation of ₹ 27,17,259/-. 3. Assessee aggrieved by this order preferred an appeal before ld. CIT(A) who after considering the submissions and relying upon the decision of coordinate Bench in case of Aswani Industries, Surat in ITA No.2103/Ahd/2010 and Haripriya Processors Pvt. Ltd. in ITA No.1569/Ahd/2010 allowed the claim of depreciation. Ld. Sr. DR supported the order of Assessing Officer and submitted that ld. CIT(A) had not justified in deleting the addition. He submitted that the Assessing Officer has observed that the assessee has been carrying out the jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue as under: 3. I have gone through the facts of the case and the orders of the Hon'ble ITAT, Ahmedabad bench referred above. In their decision, the Hon'ble ITAT, Ahmedabad bench held that embroidery job work was manufacturing and that benefit of additional depreciation was available to an assessee engaged in business of embroidery on job work basis. I find that the facts of the appellant are identical to the facts in the cases referred above. Respectfully, following the above decisions, it is held that the assessee was entitled to additional depreciation. The A.O. is directed to allow the claim of additional depreciation. 5. The only question is to be examined whether the Assessing Officer was right in not following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be allowed as deduction. The assessee claimed that it is manufacturing concern entitled for additional 20% depreciation. According to the Assessing Officer, in view of details furnished, it is engaged in the business of embroidery work on job work basis which is not a manufacturing activity. The assessee was therefore issued a letter to show cause as to why depreciation should not be restricted to 15% and extra claim of 20% should not be disallowed and added to its total income vide show cause notice dated 12-11-2009. The assessee replied but the AO stated that the reply is not acceptable in view of the clear-cut provisions of Section 32(1)(iia) of the Act. Accordingly, the Assessing Officer disallowed the additional depreciation claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entitled to be considered for the purposes of such development rebate. We are of the view that it makes no difference that in the particular case, the assessee buys the cloth and then processes it, using the machinery, by embroidering it and, in some cases, by dyeing it. The assessee utilizes the machinery in the production of processed textiles. Therefore, the machinery is entitled to the development rebate under s.33(1)(b)(B)(i). The question has, therefore, to be answered in the affirmative and in favour of the assessee.' In view of the above, the disallowance made by the A.O is deleted and this ground of appeal is allowed. 5(i). We find that ld. CIT(A) in that case had reproduced the judgment of Hon ble Supreme Court ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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