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TMI Blog2022 (2) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... oordinate bench in the case of Texas Instruments Ltd. (supra), the assessee would be eligible for additional depreciation on other machineries also, even if those machineries are not used in the manufacture or production of article or thing. Claim of the assessee that the processing of milk would amount to manufacture, we notice that the decision rendered by the special bench in the case of B.G. Chitale [ 2008 (6) TMI 303 - ITAT PUNE ] goes against the assessee. Even under the definition of the term manufacture , processing of milk will not result in manufacture of article or thing, since the product milk remains as milk even after processing. Accordingly, we reject the above said contentions of the assessee. Since we have accepted the alternative contentions of the assessee, we hold that the assessee is eligible for additional depreciation on the plant and machinery used for processing of milk also and accordingly direct the A.O. to grant the same to the assessee. Deduction claimed u/s 80P(2)(e) - assessee had received rental income from letting out of milk parlours, which are selling products of the assessee - CIT-A confirming the rejection of deduction u/s 80P(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled for additional depreciation. Accordingly, he allowed additional depreciation on other machineries amounting to ₹ 1,94,68,466/- and disallowed the additional depreciation claimed on the machineries purchased for processing of milk. The Ld. CIT(A) also confirmed the same. 4. The Ld. A.R. submitted that the term manufacture has been defined now u/s 2(29BA) of the Act and it is wide enough to cover processing of milk also. He submitted that the milk is processed and different kinds of milk having different chemical compositions are being produced by the assessee and hence raw milk and processed milk should be considered as different products. Accordingly, he contended that processing of milk would fall under the category of manufacture . With regard to the decision rendered by special bench in the case of B.G. Chitale (supra), he submitted that the above said decision was rendered in the context of section 80HHC of the Act and further the definition of the term manufacture was not available in the Act at that point of time. He further submitted that the Visakhapatnam bench of ITAT has held in the case of Tirumala Dairy Pvt. Ltd. Vs. ACIT (ITA No.153/Vizag/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee claiming additional depreciation u/s 32(1)(iia) of the Act should be engaged in the business of manufacture or production of any article or thing etc. It does not state that the new machinery or plant should itself be used in manufacture of any article or thing. The question whether the machinery itself is required to be used in the business of manufacture or production for allowing additional depreciation u/s 32(1)(iia) of the Act was examined by the coordinate bench in the case of Texas Instrument (supra) and it has been held as under: 18. We have heard the submissions of the learned counsel for the Assessee and the learned DR. The provisions of Sec.32(1)(iia) of the Act based on which the additional depreciation was claimed by the Assessee reads thus: Sec.32 Depreciation. (1) In respect of depreciation of- (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a windmill had nothing to do with the manufacture of textile goods was totally not germane to the specific provision contained in section 32(1)(iia ). In the light of the aforesaid decision, we are of the view that one of the basis on which the revenue authorities disallowed the claim of the Assessee for disallowance of additional depreciation cannot be sustained. 8. Hence, we are convinced with the alternative contention of the assessee. We have earlier noticed that the A.O. has allowed additional depreciation on machineries used for manufacture of butter, ghee, pedha, etc., which clarifies that the assessee is engaged in the business of manufacture or production of any article or thing. Hence, as per the ratio laid down by coordinate bench in the case of Texas Instruments Ltd. (supra), the assessee would be eligible for additional depreciation on other machineries also, even if those machineries are not used in the manufacture or production of article or thing. 9. With regard to the claim of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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