TMI Blog2012 (11) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Levy of Interest - levy of interest u/s. 234B and 234C of the Act is consequential and mandatory in the nature - this ground is dismissed - Appeal of assessee is dismissed. Allowability of foreign travel expenditure - held that:- , the assessee not furnished bifurcation of expenditure as related to business and pleasure trips - Being so, the CIT(A) directed the Assessing Officer to disallow 2/3 of expenditure. Before us also nothing has been furnished. However, the AR made as plea that the assessee could furnish details of foreign travel as relating to business trips as well as pleasure trips. - matter remitted back - appeal of assessee is partly allowed for statistical purposes. - IT Appeal Nos. 20 (Hyd.) of 2012 and 1828 (Hyd.) of 2011 - - - Dated:- 5-10-2012 - CHANDRA POOJARI AND SAKTIJIT DEY, JJ. K.A. Sai Prasad for the Appellant. K. Gnana Prakash for the Respondent. ORDER Chandra Poojari, Accountant Member - These two appeals by the assessee are directed against different orders of the CIT(A)-II, Hyderabad dated 2.12.2011 and 23.9.2011 for assessment years 2005-06 and 2008-09, respectively. 2. First we will take up ITA No. 20/Hyd/2012 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and standardisation was actively used for the purpose of production of curd and ghee. According to him, the Assessing Officer is not correct in observing that machinery installed at milk chilling/processing centre, sales outlet are nothing to do with the manufacture of curd or ghee, etc. He submitted that curd and ghee could be manufactured only after pasteurisation and standardisation of milk. Thus the machinery or plant installed at milk chilling plant/processing centre have direct nexus with the manufacturing of curd and ghee, etc. Further he relied on the order of the Tribunal in the case of G.S. Prabhakar v. Asstt. CIT dated 30th November, 2010 in ITA No. 1154/ Hyd/2010 for assessment year 2005-06 wherein the Tribunal held that reopening of assessment is bad in law. For similar proposition he also relied on the order of the Tribunal in the case of Lee Pharma Pvt. Ltd. dated 8th June, 2012 in ITA No. 1236/Hyd/2010 wherein the Tribunal held that reopening of assessment is bad in law by relying on the judgement of Delhi High Court in the case of CIT v. Kelvinator of India [2002] 256 ITR 1 and also on the judgement of Supreme Court in the same case reported in CIT v. Kelvinator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee where duty drawback and DEPB incentives were treated as "profits derived from industrial undertaking" and assessee was allowed deduction under section 80-IB, in original assessment, thus, to correct the wrong deduction allowed to assessee under section 80-IB, re-opening of assessment was justified. It has been held that under Section 147 of the Act, after its amendment w.e.f. 1.4.1989, wide power has been given to the assessing officer even to cover the cases where the assessee had fully disclosed the material facts. The only condition for action is that the assessing officer should have reason to believe that the income chargeable to tax had escaped assessment. Such belief can be reached in any manner and is not qualified by a precondition of full and true disclosure of material facts by the assessee as contemplated in the pre-amended section 147(a) of the Act. 5. The DR also relied on the judgement of Supreme Court in the case of Indian Hotels Co. Ltd. v. ITO [2000] 245 ITR 538 wherein it was held as under: "In order to get special deduction under section 80J of the Income-tax Act, 1961 or investment allowance under section 32A the requirement is: the assessee-company mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re required to be satisfied by such assessees are different. Therefore, an assessee who is carrying on a trading activity of business of a hotel cannot claim the benefit granted to an industrial undertaking by contending that it also produces foodstuff or food packets. 6. Regarding the merit of allowability of depreciation, the learned AR submitted that the assessee is entitled for additional depreciation as the Tribunal held that the manufacture of butter milk and cream amounts to manufacturing activity and, therefore, the assessee is entitled for deduction u/s. 80I of the Act. Further it was submitted that in the process of production of these items from raw milk the entire plant and machinery were exploited and, therefore, additional depreciation u/s. 32(1)(iia) on plant and machinery installed by the assessee is entitled for depreciation. 7. The DR opposed the argument of the AR. 8. We have heard both the parties on both the issues. Reopening of assessment for the purpose of reconsideration of additional depreciation granted on machinery installed at milk chilling plant/ processing centre/sales outlet on the reason that additional depreciation is not allowable as the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is entitled for additional depreciation u/s. 32(1)(iia) of the Act. The plant and machinery used in the production and manufacture of curd and ghee must have a direct and immediate nexus with the assessee's business. Although milk is required for the purpose of manufacturing of curd and ghee, standardised and pasteurised milk for the purpose of production of curd and ghee is a step removed from the business of production of curd and ghee. The curd and ghee could have been produced by the assessee from the milk without standardisation and pasteurisation. Usage of pasteurised condensed milk is not necessary for the purpose of production of ghee and curd. Because the assessee used the standardised and pasteurised milk, we cannot grant the additional depreciation on the plant and machinery which are used for the purpose of standardisation and pasteurisation of milk. Accordingly, even on merit we decide the issue against the assessee. The various case-law relied on by the assessee-company are delivered on their own context and cannot be applied to the facts of the present case. 9. The other ground is relating to levy of interest u/s. 234B and 234C of the Act which is conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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