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TMI Blog2010 (7) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation claimed on machineries, purchased under TUFS of the Govt. of India. 2. It is therefore prayed that the addition of ₹ 16,46,849/- confirmed by the Hon. CIT (Appeals) may please be deleted". 2. Briefly, the facts of the case are that the AO disallowed depreciation of ₹ 16,46,849/- out of total depreciation of ₹ 36,27,189/- claimed @ 50% on plant and machinery under Technology Up-gradation Fund Scheme (TUF) for Textile and Jute Industries. In the assessment order the AO has stated that the assessee company is engaged in the business of manufacturing and trading of texturised yarn. The same activity was undertaken by the assessee company in the last year and unit was started in the month of March, 2004. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee. The learned DR reiterated the stand of the departmental appeal as is earlier argued by the learned DR in the case of Agarwal Rayons Pvt. Ltd. (supra). 4. On consideration of the rival submissions we are of the view that the issue is covered in favour of the assessee by the order of the Tribunal in several cases particularly in the case of Agarwal Rayons Pvt. Ltd. (supra) in which the submissions of the parties and findings of the Tribunal are reproduced as under: "5. The Ld. A.R. submitted that Tribunal has taken a view that texturising and twisting activities are part of the processing and are covered under Appendix-1 Part-A, III at Sr.No.6 which has been referred to by A.O. on page-4 of the assessment order. He referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manufacturing of Yarn. From the above table following inferences could be drawn. 1. All the four appellants were engaged in the composite activity of manufacturing of Yarn and art Silk Cloth. 2. They had separate unit for manufacturing of Yarn & art Silk Cloth. 3. The yarn manufactured by them was used for captive consumption of the appellants themselves to manufacture art silk cloth. 4. There was perfect backward and forward linkage between manufacturing process of yarn and art silk cloth. In light of the above inferences what one could safely conclude is benefit of depreciation at higher rate allowed by the Hon'ble ITAT., Ahmedabad is to all those appellants which had weaving facility on their own and used manufactured yarn for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain specific terms and conditions. Above facts squarely applicable to appeal under consideration. It is also humbly submitted that the view expresse by the Supreme Court in the case of IPCA Laboratories (266 ITR-521) which can act as guiding force in the instant case also. The Supreme Court opined in its order (supra) that an incentive provision has to be strictly interpreted and if the wordings of the section is clear, then benefits which are not available cannot be conferred by ignoring or misinterpreting words in the section." 7. We have considered the rival submissions and perused the material on records. In our considered view the facts of the present case and facts in the case of referred to by the Ld. A. R. particularly in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation table reads as under:- "Machinery and plant, used in weaving processing and garment sector of Textile Industry, which is purchased under TUFS….. from this it cannot be read that weaving and processing is provided by cloth so as to infer that it is only weaving and processing of cloth whose machineries are entitled for higher depreciation. The words used are weaving, processing and garments sector of textile industry." 9. In other words, weaving, processing and garments sector are part of textile industries which is a larger group. In this textile industry, the weaving processing and garment sector are covered in respect of whose machineries, the high rate of depreciation is provided. Thus the word processing would include ..... X X X X Extracts X X X X X X X X Extracts X X X X
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