9911796707
TMI Blog2010 (4) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... . The first ground raised in this appeal reads as under: 1. The ld. CIT(A) erred in confirming rant of depreciation on machinery in weaving sector at lower rate when the appellant was entitled to depreciation at higher rate as per the prescribed rules. 3. At the time of hearing before us, it is stated by the learned counsel that the assessee had purchased plant and machinery used in textile industry under TUFS (Technology Upgradation Fund Scheme) and therefore it is entitled to 50% depreciation as per Appendix-I, Part-A, III (6). That the AO denied the assessee's claim of depreciation on the ground that the assessee is only in the business of texturising, twisting of yarn and is neither weaving nor manufacturing garments. He has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessee is entitled to depreciation at the rate of 50% on the plant machinery used in weaving processing and garment sector of textile industry which is purchased under TUFS. In the case of the assessee it is not in dispute that the plant machinery in respect of which the assessee has claimed depreciation at the rate of 50% were purchased under TUFS between the period 1-4-2001 to 31-3-2004. As per the AO these machineries purchased under ITA.No.870/Ahd/2007 and ITA No.2807/Ahd/2009 TUFS were utilized for the purpose of texturising and twisting activity and therefore the same does not fall within the category of allowability of 50% depreciation. We find that identical issue is considered by the ITAT in the case of Nangalia Sizers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machines. We find that tax authorities have not justified in denying the claim of the assessee for depreciation on the twister machine at the rate of 50%, and therefore, we set aside their respective orders and allow the claim of the assessee . 5.4 The learned AR of the assessee submitted that the above decision of the Tribunal is squarely applicable to the facts of the present case and therefore, the claim of the assessee may be allowed. 6. Shri R. P. Ghosh, learned DR relied on the orders of the lower authorities. 7. After hearing the learned representatives of both the parties, we find that the issue is squarely covered in favour of the assessee and against the Revenue by the decision of ITAT Ahmedabad 'D' Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of hearing that the entire yarn was not utilized for the purpose of weaving, but was partly sold in the market. In our opinion, even if the yarn was partly utilized for the purpose of making grey cloth, the assessee is using plant machinery for the purpose of weaving. On the above facts decision of the ITAT in the case of Nangalia Sizers Pvt. Ltd. (supra) would be squarely applicable. Respectfully following the same, we direct the AO to ITA.No.870/Ahd/2007 and ITA No.2807/Ahd/2009 allow depreciation on the plant machinery purchased by the assessee under TUFS @ 50%. 6. Ground No.2 of the assessee is against the charging of interest under Section 234B of the Act. The same is admitted to be consequential. We therefore direct the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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