TMI Blog2012 (7) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture or production but only transportation of molasses and spirit. Thus, the first condition is not satisfied and thus not eligible for claiming additional depreciation - against assessee. - IT APPEAL NO. 742 (MDS.) OF 2012 - - - Dated:- 15-6-2012 - ABRAHAM P. GEORGE, V. DURGA RAO, JJ. ORDER Abraham P. George, Accountant Member In this appeal filed by the Assessee, its grievance is that additional depreciation claimed by it under Section 32(1)(iia) of the Income Tax Act, 1961 (in short 'the Act') on the wind mill installed and used by it during the relevant previous year was not allowed to it. 2. Short facts apropos are that assessee engaged in the business of transport of spirit and Molasses had acquired a new w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill, which constituted a standalone industrial undertaking. Prior to this, assessee was not engaged in the business of production of any article or thing. He, therefore, held that Assessing Officer was justified in disallowing the claim of additional depreciation. 4. Now before us, Authorised Representative of the assessee strongly assailing the orders of the authorities below submitted that manufacture or production of any article or thing had to be given a common understanding and accordingly it will include production of electricity. In support, he relied on the decision of Delhi Bench of this Tribunal in the case of N.T.P.C. Limited v. DCIT in ITA No. 1438/Del./2009 dated 30.04.12. Further according to him it was not necessary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of any article or thing. No doubt the Assessing Officer, took a view that electricity cannot be considered as article or thing resulting out of manufacture or production. We are of the opinion that this view cannot be accepted since it will be a narrow interpretation not warranted by the wordings of the provision. Hon'ble Supreme Court in the case of CST v. M.P. Electricity Board , AIR 1970 SC 732 and in the case of State of A.P. v. NTPC 127 STC 280 held that power/electricity generated by an assessee was an article or goods. Taking note of these decisions, the Co-ordinate Bench of this Tribunal in the case of N.T.P.C. Limited ( supra ) had held that wind mill had to be considered as an industrial undertaking. 7. The questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hieves the substantial expansion by way of increase in installed capacity by not less than ten per cent. Provided further that no deduction shall be allowed in respect of- ( a ) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or ( b ) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or ( c ) any office appliances or road transport vehicles; or ( d ) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head "Profits and gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of manufacture or production. Question now is whether in such a situation proviso (A) would become otiose. Addition of plant and machinery in an already existing unit, for claiming additional depreciation would have to result in substantial expansion of the installed capacity by not less than ten per cent as per proviso (B). The condition regarding existence of a business of manufacture or production of any article or thing will be ordinarily relevant and applicable only where additional depreciation claim is for plant and machinery resulting in substantial expansion of capacity. To bring in a harmonious interpretation, the only sense in which Proviso (A) can be understood is that as a result of new plant and machinery being in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of any article or thing and whether Tribunal was right in allowing the claim of additional depreciation on windmill, held as under at para 5 of the judgment:- "5. In the case on hand, the assessee is stated to have set up a windmill at a cost of Rs. 5,85,60,000. It is true that the assessee is a company engaged in the business of manufacture of textile goods. As far as application of s. 32(1)(iia) of the Act, is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31st March, 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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