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2022 (2) TMI 433 - AT - Income TaxDisallowance of additional depreciation claimed u/s 32(1)(iia) - Proof of machinery to used in the business of manufacture or production - HELD THAT:- Assessee claiming additional depreciation u/s 32(1)(iia) of the Act ‘should be engaged in the business of manufacture or production of any article or thing etc.’ It does not state that the new machinery or plant should itself be used in manufacture of any article or thing. The question whether the machinery itself is required to be used in the business of manufacture or production for allowing additional depreciation u/s 32(1)(iia) of the Act was examined by the coordinate bench in the case of Texas Instrument [2020 (3) TMI 1195 - ITAT BANGALORE]. We are convinced with the alternative contention of the assessee. We have earlier noticed that the A.O. has allowed additional depreciation on machineries used for manufacture of butter, ghee, pedha, etc., which clarifies that the assessee is engaged in the business of manufacture or production of any article or thing. Hence, as per the ratio laid down by coordinate bench in the case of Texas Instruments Ltd. (supra), the assessee would be eligible for additional depreciation on other machineries also, even if those machineries are not used in the manufacture or production of article or thing. Claim of the assessee that the processing of milk would amount to manufacture, we notice that the decision rendered by the special bench in the case of B.G. Chitale [2008 (6) TMI 303 - ITAT PUNE] goes against the assessee. Even under the definition of the term “manufacture”, processing of milk will not result in manufacture of article or thing, since the product “milk” remains as “milk” even after processing. Accordingly, we reject the above said contentions of the assessee. Since we have accepted the alternative contentions of the assessee, we hold that the assessee is eligible for additional depreciation on the plant and machinery used for processing of milk also and accordingly direct the A.O. to grant the same to the assessee. Deduction claimed u/s 80P(2)(e) - assessee had received rental income from letting out of milk parlours, which are selling products of the assessee - CIT-A confirming the rejection of deduction u/s 80P(2)(e) - HELD THAT:- We are of the view that the decision rendered by Ld. CIT(A) on this issue does not call for any interference as the ‘milk parlours’ cannot be considered as godowns or warehouses contemplated u/s 80P(2)(e) of the Act. Accordingly, we confirm the order passed by Ld. CIT(A) on this issue. Appeal filed by the assessee is partly allowed.
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