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TMI Blog2018 (5) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... kins and filed its return of income at an income of Rs. 8,47,58,721/- on 26.06.2010. In the assessment proceedings, the Assessing Officer noticed that the assessee has claimed additional depreciation of Rs. 72,90,238/- on the capital assets purchased and installed by the assessee virtue of section 32(1)(iia) of the Act. The assessee was asked to justify the claim. In response, the assessee filed the details of assets on which the impugned additional depreciation was claimed u/s. 32(1)(iia) of the IT Act. From these details, the Assessing Officer prepared a list of some of the items randomly gathered on sample basis as under : S. No. Item Bill No. Amount Installed at 01. General A.C. 2 Ton 483 31.000/- Record Room 02. Split A.C. 1.5 Ton 483 22.000/- R&D Office 03. Jet Air Curtain 002/APR/ 2009-10 18.125/- Preet Vihar Outlet 04. Exhaust & Ventilation Work SA/2/09 9,04,950/- Preet Vihar Outlet 05. Blue Star Window A.C. R-2009-10/ 00101 66,500/- Not known 06. InkJet Printer XM/09-10/ 00000183 2,16,480/- Plot No. 21, Sec.-24, Faridabad. 07. Dhir Dish Washing Machine 588 1,55,0007- Preet Vihar 08. Misc. Item (Ice Cream Counter, Matka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises or any residential accommodation, including accommodation in the nature of a guest house or on any office appliances or road transport vehicles. Based on the above considerations, the Assessing Officer disallowed the additional depreciation worth Rs. 72,90,238/-, claimed by assessee and added the same to the total income of the assessee. 4. In appeal before the ld. CIT(A), assessee filed a detailed written submissions and relied on various case laws. The ld. CIT(A), after considering the submissions of the assessee, deleted the addition observing as under : "5.3.7. An assessee engaged in the business of manufacture or production of any article or thing is entitled to claim additional depreciation in respect of new machinery or plant (other than ships & aircraft) acquired and installed after 31 March, 2005, subject to the fulfillment of specified conditions. Additional Depreciation is allowable at 20% of the actual cost of such plant or machinery in the year in which such plant or machinery is acquired and put to use. However, if the said plant & machinery is put to use for less than 180 days in the year in which it is acquired, the additional depreciation is allowable at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to take place." 5.3.11 Relying on the observation rendered in the case of Pio Food Packers cited supra, and on analysis of processes involved, the Hon'ble Supreme Court in Aspinwall & Co. Ltd. V. CIT(2001) 251 ITR 323 (SC) has held that curing of coffee by process of producing coffee beans from raw berries amounts to manufacture. The court observed that the term has to be under stood as meaning the production of articles for use from raw or prepared materials by giving such materials new forms, qualities or combinations, whether by hand labour or machines. The process of curing of Coffee starts with the drying of coffee and thereafter there comes the stage of hulling which means removing Outer husk of coffee bean. Thereafter, there is a process of roasting which gives brown colour to coffee an d there is also change in chemical component and that the process of roasting brings with it splendid aromatic qualities and pleasing taste. 5.3.12 Though it is true that while interpreting a taxing statute, regard must be had to the scheme, context and legislative history of provision, but with all humility, it appears that there is no material to hold that legislature did not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this tariff code item is explained as under : "6. Tarrif item 2106 90 99 includes sweet meats commonly known as "Misthan" or Mithai" or called by any other name. They also include products commonly known as "Namkeen", "Mixtures", Bhujia", "Chabena" or called by any other name. Such products remain classified in these subheadings irrespective of the nature of their ingredients." He also relied on a case law in DCIT vs. Bengal Beverages (P) Ltd., 87 taxmann.com 13 (Kol. Bench). 7. After considering the rival submissions of the parties and perusing the entire material available on record, we find much force in the contention of the assessee that the assessee is engaged in the manufacturing activities. The ld. CIT(A) has also correctly dealt with the objection of the Assessing Officer regarding the activities of the assessee being that of a manufacturer. The ld.CIT(A) has also considered various case laws in support of his conclusion that the assessee comes within the category of a manufacturer. The contentions made by the assessee based on National Industrial Classification, referred to above, are also found acceptable on the point of assessee being manufacturer. We, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or road transport vehicles. Therefore, applying the above provisions, the claim of assessee is required to be tested. The assessee, as stated above, is engaged in manufacturing of sweets, as the assessee is engaged in the manufacturing activities and restaurant business. On each of the outlet, it manufactures sweets and other food products. It is also obvious from the financial statement that about 91% of the Revenue is collected by the assessee from manufacturing activities and 9% thereof is earned from restaurant. Also, the equipments or plants are installed at those premises. Further, the ld. AO has not brought any material on record to show that those plants are installed at any office premises or any residential accommodation in the nature of guest house. It is also a matter of common knowledge that Air Conditioners are required at manufacturing outlets to keep the sweets also in proper condition over and above refrigerators. Electricity distribution penal also cannot be said to be installed at residential place. No material is brought on record by the AO that the outlets do not manufacture sweets. It is of paramount importance that the AO has granted normal depreciation on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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