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2014 (10) TMI 1042 - AT - Income TaxNature of expenditure - Product registration expenses - revenue or capital expenditure - assessee had obtained valuable marketing benefits in several countries; hence, the expenditure was in capital field and not a revenue expenditure - AO has disallowed the assessee’s claim of additional depreciation in respect of such machinery which were generating electricity on the ground that those machineries were not producing any “article or thing” hence not eligible for additional depreciation as prescribed u/s.32(1)(iia) - HELD THAT:- Assessee in these cases were involved in different items of manufacturing and purchased windmills. On the identical issue, M/S. VTM LIMITED [2009 (9) TMI 35 - MADRAS HIGH COURT],TEXMO PRECISION CASTINGS [2009 (10) TMI 140 - MADRAS HIGH COURT] AND M/S. HI TECH ARAI LIMITED [2009 (9) TMI 60 - MADRAS HIGH COURT] held that assessee are entitled to additional depreciation on cost of windmill acquired. It is also held that the plant and machinery purchased need not be operationally used for manufacturing articles or things. Since the only objection of the assessing officer was that newly purchased machinery generated electricity which is not articles or thing, is no longer a relevant issue in the light of these decisions. From the facts narrated in the assessment order and in the appellant's submission, it is clear that appellant fulfilled all the conditions required for claim of additional depreciation on machinery purchased by it. The addition of machinery was after 31st of March 2005. Appellant was already in the business of manufacturing articles for things. The machine purchased is not covered by any clause of proviso to this section. The same was not used by any person before installation. It is not installed in office or residential premises. This is not office appliance or road transport vehicle - these machines are also not eligible for 100 percent depreciation in one year. Considering this appellant fulfils all the conditions required for claim of additional depreciation. Respectfully following the decisions of Madras High Court relied upon by the appellant, assessing officer is directed to allow additional depreciation on new plant and machinery purchased - Decided against revenue.
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