TMI Blog2012 (10) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee company is not allowable as the assessee company is not engaged in manufacturing of any article or thing. In response to the notice issued u/s. 148 of the Act, the assessee replied that the return already filed may please be treated as having been filed in response to the notice issued u/s. 148 of the IT Act . The Assessing Officer being not convinced with the reply of the assessee disallowed the additional depreciation i.e., sum equal to 20% of the actual cost of such machinery/plant as enumerated u/s. 32(1)(iiia) of the Act worked out at Rs. 83,53,108 and added back the same to the income of the assessee. On appeal, the CIT(A) confirmed reopening of assessment as well as the addition made by the Assessing Officer. 3. Regarding reopening of assessment the learned AR submitted that at the time of completing assessment all the information was available to the Assessing Officer and he has duly considered all the material facts for the purpose of assessment and allowed the claim of the assessee with regard to additional depreciation and the same cannot be considered now by issuing notice u/s. 148 of the Act as there is no fresh tangible material which came to the knowledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery used for the manufacture of an article or thing as per the provisions of Sec. 32(l)(iia). Omitted to do so, resulted in under assessment and accordingly re-opened the assessment u/s. 147 of the IT Act. The assessee's contention that the reopening proceedings amount to the change of opinion and therefore the proceedings u/s. 147 should be annulled is not acceptable, in view of the following judicial authorities: 1) Praful Chunilal Patel vs. ACIT (1999) 236 ITR 832 : Reassessment wherein held that on a proper interpretation of section 47 of the Act, it would appear that the power to make assessment or re-assessment within four years of the end of the relevant assessment year would be attracted even in cases where there has been a complete disclosure of all relevant facts upon which a correct assessment might have been based in the first instance, and whether it is an error of fact or raw that has been discovered or found out justifying the belief required to initiate me proceedings. The words, escaped assessment where the return is filed are apt to cover the case of a discovery of a mistake in the assessment caused by either an erroneous construction of the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch deal with grant of investment allowance or deduction under section 80J it is apparent that it is used to mean production of a new article or bringing into existence some new commodity by an industrial undertaking. It would not be applicable in cases where only processing activity is carried out. Further, such production activity must be by an industrial undertaking and not by the assessee having mainly trading activity. A statute cannot always be construed with the dictionary in one hand and the statute in the other; regard must also be had to the scheme, context and to the legislative history of the provision. The foodstuff prepared by cooking or by any other process from raw materials such as cereals, pulses, vegetables, meat or the like cannot be regarded as a commercially distinct commodity and it cannot be held that such foodstuff is manufactured or produced. Further, the Legislature has differentiated between an industrial undertaking and trading activity of the assessee who deals in business of hotel, by making different provisions. The business of hotel and that of industrial undertaking are considered to be distinct and separate for the purpose of grant of inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessing centre, sales outlet and plant and machinery installed at milk powder centre are directly relatable to the milk processing which does not amount to manufacture. Therefore, as per the provisions of section 32(1)(iia) the additional depreciation cannot be granted. In our opinion, the reason recorded by the Assessing Officer is a valid basis for re-assessment proceedings by issuing notice u/s. 148 of the Act. In our opinion, additional depreciation is not available to that part of the machinery installed for the purpose of standardisation and pasteurisation of milk. The activities of standardisation and pasteurisation of milk are different from manufacturing of curd, ghee and other products. Standardisation and pasteurisation of milk cannot be equated with manufacturing of curd and ghee or other milk products. The new machinery which was installed for the purpose of manufacturing of production of any article or thing is entitled for additional depreciation not otherwise and not on the machinery installed in any other way by the assessee. As it was already decided by the Tribunal Pune Special Bench in the case of B.G. Chitale (supra), standardisation and pasteurisation cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) directed the Assessing Officer to allow 1/3rd of the expenditure instead of 1/5th of the expenditure. Against this the assessee is in appeal before us. 11. We have heard both the parties and perused the material on record. Before the lower authorities, the assessee not furnished bifurcation of expenditure as related to business and pleasure trips. Being so, the CIT(A) directed the Assessing Officer to disallow 2/3 of expenditure. Before us also nothing has been furnished. However, the AR made as plea that the assessee could furnish details of foreign travel as relating to business trips as well as pleasure trips. Considering the request of the assessee's counsel, we remit the entire issue to the file of the Assessing Officer with a direction to get bifurcation of expenditure as attributable to business trips and pleasure trips. On obtaining the information, the Assessing Officer is directed to disallow the expenditure relating to pleasure trips. If the assessee fails to furnish the same the Assessing Officer shall pass consequential order in terms of the CIT(A) order. The appeal of the assessee is partly allowed for statistical purposes. 12. In the result, ITA No. 2 ..... 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