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TMI Blog2018 (3) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... chased during the year. In this regard, we find that the AO has raised the queries regarding the addition of fixed asset which are duly responded by the assessee during the course of assessment proceeding. In view of above, we feel that the assessment order u/s 143(3) of the Act was passed duly after due examination of the records for the addition of plant and machinery as well as activities carried on by assessee - Decided in favour of assessee - ITA No.779/Kol/2016 - - - Dated:- 28-2-2018 - Shri N.V.Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member For The Appellant : Shri Robin Maheshwari, ACA For The Respondent : Shri A.K. Tiwari, CIT-DT ORDER PER Waseem Ahmed, Accountant Member:- This is an appeal filed by the assessee against order of Ld. Pr. Commissioner of Income Tax-1, Kolkata passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) in M.No.Pr. CIT-1/15- 16/U/s263/BLA Industries/2011-12/12629-31 dated 23/28.03.2016 for assessment year 2011-12. Shri Robin Maheshwari, Ld. Authorized Representative appeared on behalf of the assessee and Shri A.K. Tiwari, Ld. Departmental Representative appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ld. Pr. CIT u/s 263 of the Act issued a show cause notice upon assessee for clarification of the issues as discussed above. In compliance thereto, assessee submitted that it is in business of coal mining which is a manufacturing activity. Therefore, assessee was entitled for additional depreciation on the plant and machinery used in the business of manufacture / production of article or thing. The assessee in support its claim has relied on the following judgments:- a) CIT vs. G.S. Atwl Co.(Gua) (2002) 254 ITR 592 (Cal) b) Khalsa Brothers vs. CIT (1996) 217 ITR 185 (Cal) c) CIT vs. Singareni Collieries Co. Ltd. (11996) 221 ITR 48W(AP) d) CIT vs. Sesa Goa Ltd. (2004) 271 ITR 331 (SC) However, Ld. Pr.CIT was of the view that no necessary enquiry has been conducted by the AO during the course of assessment proceeding, which rendered the order of AO as erroneous in so far a prejudicial to the interest of revenue. Accordingly, Ld. Pr.CIT held that the order of AO is erroneous in so far a prejudicial to the interest of revenue by observing as under:- 10. I am also of the view that his error lay in his doing inadequate scrutiny and in his making the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity. As per the ld. CIT the additional depreciation u/s 32(1)(iia) of the Act is available in respect of plant machineries only in the cases where plant and machineries are used in the manufacture or production of products / things. Thus the activity of the assessee is not eligible for additional depreciation as per the provision of Section 32(1)(iia) of the Act. The Ld. AR however, submitted that various courts have held that activity of mining and extraction of coal amounts to manufacturing activity. Therefore, assessee cannot be denied the benefit of additional depreciation as per the provision of Section 32(iia) of the Act. Ld. AR in support assessee s claimed relied on the judgment of various courts which have been explained in the preceding paragraph of this order. Ld. AR further submitted that the activities of the assessee and details of the fixed assets have been duly examined by AO during the assessment proceedings. Ld. AR further submitted that AO has issued two notices u/s. 142(1) on 22.02.2013 and 10.10.2013 respectively where the following questions were raised to the assessee. The question raised by AO in the notice issued u/s 142(1) of the Act date 22.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed by assessee failed to conduct the necessary enquiries whether the conditions specified u/s. 32(1)(iia) of the Act have been fulfilled by assessee. Ld. DR drew our attention on explanation-2 to Section 263 of the Act and submitted that non enquiry renders the order of AO as erroneous in so far as prejudicial to the interest of revenue. Ld. DR in support of Revenue s claim relied on the judgment of Hon'ble jurisdictional High Court in the case of CIT vs. Maithan International reported in 375 ITR 123 (Cal), wherein it was held as under:- 19. It is not the law that the assessing officer occupying the position of an investigator and adjudicator can discharge his function by perfunctory or inadequate investigation. Such a course is bound to result in erroneous and prejudicial orders. Where the relevant enquiry was not undertaken, as in this case, the order is erroneous and prejudicial too and therefore revisable. Investigation should always be faithful and fruitful. Unless all fruitful areas of enquiry are pursued the enquiry cannot be said to have been faithfully conducted. In a different context the Apex Court observed contra veritatem lex nunquam aliquid permitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, something that was not there comes up and it is, therefore, a production of coal. [Para 14] The point that the assessee was not an industrial undertaking even though it might be engaged in production of coal was also to be decided against the revenue. Under the definition of an 'industrial undertaking' given under section 33B, Explanation , mining activity would bring the assessee within the definition of an 'industrial undertaking'. [Para 15] So far as the assessee was concerned, an undertaking, it certainly was. There was no fact to show that the assessee was not an industrial undertaking. Ordinarily speaking if a manufacturing activity or an article producing activity is carried on, an undertaking carrying on such activity is to be classed as an industrial one. It might be small scale or large scale, that does not matter much. Even if an undertaking is manufacturing or producing articles, but is still not to be classed as an industrial one, for this clear indications have to be given as to why this difference should be made in the case of the undertaking in question, so that it stands out from the general category. No such particular difference was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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