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TMI Blog2024 (10) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... m of remaining 10% additional depreciation is made f the Assessment Year 2011-12. Depreciation on electrical items which are forming part of plant and machinery - Tribunal following the decision of this Court in case of CIT vs. Starlight Silk Mills Pvt. Ltd. [ 2005 (8) TMI 40 - GUJARAT HIGH COURT] wherein it is held that AC plants, electric installation and transformers form integral part of plant and machinery and eligible for depreciation. Similarly, in case of Raw Flints (P) Ltd [ 1987 (1) TMI 490 - ITAT AHMEDABAD] held that electrical installations are integral part of the manufacturing process and cannot be said to be not forming part of plant and machinery. The Tribunal following the aforesaid decision held that the electrical fittings could be forming part of the plant and machinery and the assessee is eligible for depreciation and additional depreciation accordingly. We are in complete agreement with the reasonings given by the Tribunal on the basis of the findings stated herein above - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MRS. JUSTICE MAUNA M. BHATT Appearance: For the Appellant(s) No. 1 : Mrs Kalpana K Raval (1046) For the respondent : None. ORAL ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery and Section 32 (1) (ii) was amended for claim of additional depreciation w.e.f A.Y.2016-2017. 5. The Assessing Officer also made an addition of Rs. 2,58,50,676/- on account of alleged incorrect claim of depreciation and additional depreciation on various electrical items by not treating them as plant and machinery. 6. Being aggrieved, the assessee preferred appeal before the Commissioner (Appeals) who confirmed the dis-allowance made by the Assessing Officer not only confirmed the dis-allowance made by the Assessing Officer on additional depreciation but also enhanced the same on ground that the additional depreciation of Rs. 32,65,56,918/- is not allowable since, the assessee is not engaged in the business of manufacturing and production of an article or a thing. The CIT (Appeals) also confirmed the dis-allowance on the electrical items namely substations, DG set and transformers by not considering the same as part of plant and machinery which is eligible for depreciation and eligible additional depreciation. 7. The respondent - assessee being aggrieved preferred the appeal before the Tribunal. The Tribunal so far as the question of granting additional 10% additional deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plant and machinery purchased during the previous years. Thereafter, the Tribunal held as under: 16. We have given our thoughtful consideration and perused the materials available on record. It is seen from the certificate issued by the Senior General Manager (Project) of Engineering Department of the assessee company, the manufacturing units are located in remote places at Palanpur where supply of electricity was not regular and often, there is power cut in supply of electricity. It is for this reason, substation, DG set, and transformers are required for manufacture of milk product. Similarly, exhaust and pedestal fans are required for cooling to the milks. Hence the same cannot be categorized as pure electrical items but to be treated as part and parcel of the plant and machinery for the manufacture of milk products. 10. The issue also with regard to additional depreciation is raised in Question Nos. 1 and 2 is also covered by the decision of this Court. In case of Question No.2 in case of The Principal Commissioner of Income-Tax vs. Kalpataru Power Transmission Ltd. in Tax Appeal No.791 of 2019 dated 06.01.2020 wherein it is held as under: 6. In view of the above facts, it wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount calculated at the percentage prescribed for an asset under clause (iia) for that previous year, then, the deduction for the balance fifty per cent of the amount calculated at the percentage prescribed for such asset under clause (iia) shall be allowed under this sub-section in the immediately succeeding previous year in respect of such asset: Provided also that where an asset being commercial vehicle is acquired by the assessee on or after the 1st day of October, 1998 but before the 1st day of April, 1999 and is put to use before the 1st day of April, 1999 for the purposes of business or profession, the deduction in respect of such asset shall be allowed on such percentage on the written down value thereof as may be prescribed..... (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing or in the business of generation, transmission or distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed deduction under clause (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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