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2015 (10) TMI 1091 - HC - Income TaxDisallowance of additional depreciation u/s. 32(iia) on embroidery machine - use of the input and the output remains the same even after doing the embroidery work - whether the embroidery work carried out by the assessee on synthetic fabrics would amount to "manufacture" or "production"? - ITAT allowed the claim - Held that:- In the present case, the assessee carries on embroidery work on synthetic fabrics. When the assessee carries on embroidery work on the synthetic fabric, such synthetic fabric is converted into a new article, viz. embroidered synthetic fabric which is commercially known as another article. The nature of the article produced would depend upon the kind of embroidery carried out on the synthetic cloth. The ultimate article produced may be an embroidered saree or an embroidered dress material or some other article. Therefore, there would be a transformation in the basic synthetic fabric on which embroidery has been carried out resulting into a new article which is commercially known as another article. Under the circumstances, the work of embroidery carried on by the assessee would fall within the ambit of definition of "manufacture" as envisaged under section 2(29BA) of the Act. The Tribunal, therefore, did not commit any legal error in holding that the activity carried on by the assessee falls within the ambit of manufacturing activity and thereby the assessee is entitled to avail of the additional depreciation under section 32(1)(iia) of the Act in relation to the machinery installed by it.- Decided in favour of assessee.
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