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2021 (5) TMI 152 - AT - Income TaxAdditional depreciation u/s 32(1)(iiia) - whether the process of blending of butane and propane which is carried out in scientific manner, with use and aid of sophisticated plant and machinery and whether the transformation brought about an entirely new product in the name of LPG and whether such activity is a manufacturing activity so that the assessee is eligible to claim additional depreciation u/s 32(1)(iiia)? - HELD THAT:- As decided in [2017 (8) TMI 197 - SUPREME COURT] Hindustan Petroleum Corpn. Ltd. process of bottling of gas into cylinders for domestic use by complex technical process undertaken in plant with machinery amounts to production or manufacture of gas cylinders for purposes of deduction under sections 80-I, 80-IA and 80HH. In M/s. Indian Oil Petronas Pvt. Ltd. [2019 (4) TMI 1285 - ITAT KOLKATA] in the process of blending of butane & propane which is carried out in scientific manner with use and aid of sophisticated plant & machinery, transformation is brought about and entirely new product by the name LPG is obtained. The said object or product i.e. LPG is known to the trade and commerce by its separate distinctive commercial name and it has a different character and its end use is also different. Accordingly provisions of Section 2(29BA) of the Act and also the ratios laid down by the Supreme Court in several decisions, we have no hesitation in holding that the assessee was engaged in manufacture or production of an article or thing and therefore it was eligible for claiming additional depreciation u/s 32(1 )(iia) - Decided against revenue. TDS u/s 195A - dividend distributed to non-resident shareholders - HELD THAT:- In the instant case, the incidence of tax on dividend income is borne by the company paying dividend income by virtue of statute and not by way of any agreement and as such, the rigor of section 195A of the Act would not be applicable. In any event, it may be stated that even if the payment is to be grossed up, yet the rate specified in DTAA (if more favourable) would be applicable to gross up the said payment. Thus, in conclusion, it may be stated that the rate of tax payable on dividend distributed to non-resident shareholders would depend upon the relevant Article of the DTAA entered into between India and the country to which the non-resident belongs, subject to the fulfilment of the conditions stated. The Hon’ble Delhi High Court in the case of Pr. CIT v Maruti Suzuki Limited [2019 (12) TMI 1080 - DELHI HIGH COURT] held that the Hon’ble Tribunal is within its power to admit the additional ground in respect of claim of refund of tax paid in excess, by following provision of section 115-O of the Act instead of the relevant Article of the applicable DTAA. Thus the relevant Article of the DTAA have to be examined, we are setting aside this matter to the file of the AO for fresh adjudication in accordance with law after admitting this claim of the assessee. The AO shall consider this claim of the assessee and dispose off the case in accordance with law.
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