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2024 (4) TMI 347 - ITAT DELHIInvestment allowance u/s 32AC - claim disallowed as assessee do not fulfill the requisite condition - CIT(A) deleted addition as business activity of the assessee is manufacturing as per the Central Excise Act and that the assessee had acquired & installed the new assets during the period 01.04.2013 to 31.03.2014 - HELD THAT:- The “key” word for consideration is that the assessee should be a company who should be engaged in the business of manufacture or production of any article or thing and installs new assets after 31st day of March, 2013 but before the 01st day of April, 2015 and aggregate amount of actual cost of such new assets exceeds INR 100 crores. The term “new asset” has been defined in sub-clause (4) of section 32AC of the Act which defines new asset means any new plant & machinery (other than ship or aircraft). In the present case, the assessee is a company and claims to be engaged in the business of manufacture or production of lube oil. The assessee claims that blending of lube oil tantamount to manufacture or production as contemplated u/s 32AC of the Act. The opinion of the AO that the assessee is not engaged in the manufacturing or production activity, is contrary to the judgement of the Hon’ble Supreme Court in Hindustan Petroleum Corporation Ltd [2017 (8) TMI 197 - SUPREME COURT] - As the provision is not restricted to manufacturing activity and it also has production in its ambit. We therefore, do not find any merit in the findings of AO. Reliance placed by Ld. DR for the Revenue during the course of hearing in the case of Commissioner of Trade Tax vs M/s. Kumar Paints & Mill Stores through its Proprietor [2023 (3) TMI 943 - SUPREME COURT] would not help the Revenue as referred judgement decided the dispute under U.P. Trade Tax Act, 1948. Objection of the AO was regarding investment made by the assessee, did not meet threshold limit - Figures submitted by the assessee are self-explanatory. Revenue has not brought any contrary material to controvert the claim of the assessee that it had made investment exceeding the threshold limit. In the absence of such material, we do not see any infirmity in the finding of CIT(A). CIT(A) has given a finding on fact regarding installation of plant & machinery and as categorically recorded that it has been clarified beyond doubt that deduction is allowable in the year of installation and not in the year of acquisition. The fact that installation of the plant & machinery has been completed during the year under consideration is not in the dispute at all. CIT(A) has pointed out that it is only in the Assessment Year 2014-15, the assets has actually been capitalized in the books of the assessee. It is only in the year under consideration that such assets were put to use for production of lubricant oil on which normal claim of depreciation has been allowed by the assessee. This finding is not controverted by the Revenue. Ground No.1 raised by the Revenue is accordingly, dismissed. Denial of additional depreciation claimed u/s 32(1)(iia) - The issue whether the assessee is engaged in the manufacturing or production activity, has been elaborately discussed while deciding the Ground No.1, we have affirmed the view of Ld.CIT(A). The assessee in our considered view, would be entitled for additional depreciation under the facts of the present case. Therefore, we do not see any infirmity in the finding of CIT(A), the same is hereby affirmed.
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