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2023 (11) TMI 501 - AT - Income TaxAdditional depreciation on the plant and machinery - number of days asset is used - 50% of the additional depreciation was only claimed, since the plant and machinery were purchased and used less than 180 days, which was allowed by the A.O. in the AY 2014-15, therefore the assessee claimed balance 50% of the additional depreciation during this AY 2015-16 - HELD THAT:- As decided in COSMO FILMS LTD. [2012 (9) TMI 281 - ITAT DELHI] Law does not prohibit that balance 50% will not be allowed in succeeding year. The extra depreciation allowable u/s 32(1)(iia) in an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50% on account of usage. The so earned incentive must be made available in the subsequent year. The overall deduction of depreciation u/s. 32 shall definitely not exceed the total cost of plant machinery. In view of this matter, we set aside the orders of the authorities below and direct to extend the benefit. As following the decision of Rittal India (P) Ltd. [2016 (1) TMI 81 - KARNATAKA HIGH COURT] and also considering the amendment brought in by way of proviso to section 32(1) wherein it has been specifically stated that 50% of additional depreciation which was not allowed in the preceding assessment year shall be allowed in the subsequent assessment year, concluded that the assessee is entitled for additional 50% depreciation in the assessment year which follows the assessment year in which the machinery had been bought and put to use for less than 180 days. Decided in favour of assessee. Additional depreciation - processing of Milk and the milk products - whether assessee only engaged in the “processing of Milk” and “not manufacturing of any item”? - HELD THAT:- The assessee is a Milk Purchaser Co.Op. Society and milk is procured from various farmers and villagers. Thereafter the said milk processed under various machines and manufactured into various milk products. Thus the activity carried out by the assessee is not only processing of milk but involved detailed technical machineries and manufacturing different kind of milk products. It is in the case of CIT Vs. Gujarat Co.op. Milk Marketing Federation Ltd [2014 (1) TMI 1938 - GUJARAT HIGH COURT] held that processing of Milk and the milk products amounts to manufacture and assessee is entitled for additional depreciation. End product manufactured by the assessee is not the same raw milk that is collected from the farmers and villagers. The end product are entirely distinct with that of the raw milk. Thus the assessee cannot be denied the claim of additional depreciation. Decided in favour of assessee. Depreciation on substation, DG set, Exhaust & pedestal fans, street lighting, additional electrical equipment, transformers - at the rate applicable to plant & machinery OR electrical fitting as treated by the A.O - HELD THAT:- 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, sub-station, DG set, and transformers are required for manufacture of milk products. Similarly, exhaust & pedestal fans are required for cooling of 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. As in the case of CIT Vs. Starlight Silk Mills Pvt. Ltd. [2005 (8) TMI 40 - GUJARAT HIGH COURT] held that AC plants, electric installation and transformers form integral part of plant and machinery and eligible for depreciation. Similarly, the Co-ordinate Bench of this Tribunal in the case of Raw flints (P.) Ltd [1987 (1) TMI 490 - ITAT AHMEDABAD] held that electrical installations are an integral part of manufacturing process and cannot be divorced from ‘plant and machinery’. We hold that the electrical fittings are integral part of the plant and machinery and the assessee is eligible for depreciation and additional depreciation accordingly. Thus the Grounds raised by the assessee is hereby allowed.
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