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TMI Blog2016 (1) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... ER SHRI S.S. GODARA, JUDICIAL MEMBER For The Appellant : Shri Sanjay R. Shah, AR For The Respondent : Shri R.I. Patel, CIT/ D.R. ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. This appeal filed by the Assessee is against an order of ld. CIT dated 25.03.2015 for A.Y. 2010-11 passed u/s.263 of the Income-tax Act, 1961. 2. The relevant facts as culled out from the material on record are as under. 3. Assessee is a company stated to be engaged in the business of manufacturing and selling of starch and its derivatives. Assessee filed its return of income for A.Y. 2010-11 on 28.09.2010 declaring total loss at ₹ 1,73,86,661/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 4.02.2013 and the total loss was determined at ₹ 1,21,57,250/-. Subsequently, on examining the records of assessment proceedings, CIT noticed that Assessee has claimed additional depreciation of ₹ 38,86,967/- in respect of Bio-gas power generating engine plant. He was of the view that additional depreciation was admissible only to Assessee s engaged in the production or manufacture of articles or things ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted it be so held now. 2. The CIT erred in holding that the appellant is not engaged in manufacturing as per section 2(29BA) of the Act through the use of Biogas power Generating engine and hence was not entitled to additional deprecation. It is submitted that the appellant is engaged in manufacture of starch and accordingly is entitled to additional depreciation, it be so held now. 2.1 The CIT erred in not appreciating that the fact since appellant is engaged in manufacturing of starch it is entitled to additional depreciation irrespective of whether the Biogas power generating engine is engaged in manufacturing of article or thing. It is submitted it be so held now. 2.2 The CIT erred in not following decision of Madras High in case of CIT v. VTM Ltd. 319 ITR 336 which is now affirmed by Supreme Court. 2.3 The CIT erred in holding that generation of power does not result in production or manufacture of article or thing without appreciating that Electricity has been held to be an article or thing. It is submitted it be so held now. 4. Before us, ld. A.R. at the outset submitted that though Assessee has various grounds but the only issue is with resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n merits. The ld. D.R. on the other hand submitted that during the course of assessment proceedings a specific query on the issue of claim of depreciation was raised by the A.O vide notice u/s. 142(1) dated 27.07.2012 but there was no reply of the Assessee. He pointed to page 29 30 of the paper book and pointed to point no. 12 wherein the Assessee was specifically asked to explain the claim u/s. 32(1)(iia) and furnish the complete details and the justification of claim. He submitted that the query of the A.O was not replied by the Assessee and therefore he submitted that when A.O, without obtaining the necessary explanation proceeded to allow the claim of the Assessee, it cannot be said that A.O has applied his mind on the issue and therefore ld. CIT was right in his observation that the issue was not examined by A.O. On the issue of merits of allowing additional depreciation u/s. 32(1)(iia), he submitted that the amendment made by Finance Bill, 2012 was applicable for assessment year 2013-14 and subsequent years and therefore not applicable for the year under consideration. He further submitted by setting aside the order of A.O, no prejudice is caused to the Assessee as the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. 10. We further find that the full Bench of Hon ble Gauhati High Court in the case of CIT vs. Jawahar Bhattacharjee (2012) 341 ITR 434 (Gau) (FB) has held that not holding such inquiry as is normal and not applying mind to relevant material would certainly be erroneous assessment warranting exercise of revisional jurisdiction and that an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous non application of mind and omission to follow natural justice is in same category. 11. In the present case, it is seen that Section 263 has been invoked by ld CIT for the reason that the claim of Assessee of additional depreciation u/s. 32(1)(iia) has been allowed by the A.O without examination of its allowability. From the copy of the communication dated 27.07.2012 issue by the DCIT to Assessee whereby various details were called u/s. 142(1) it is seen that A.O had specifically asked ..... 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