TMI Blog2010 (9) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... n new material into a changed form for use. Because of the above operations carried out by assessee, the look of the fabric is changed substantially and the new article is commercially known differently from the original fabrics. Even otherwise, the word product has a wider connotation than the work manufacture Considering decision in the case S.S.M. Brothers (P) Ltd. Others v. CIT [ 1999 (1) TMI 2 - SUPREME COURT] held that Sec.32(1)(iia) also provides for additional depreciation in respect of new machinery and plant purchased by assessee who is engaged in the business of manufacture of production of any article or thing. In the above case the Hon ble Supreme Court has already held that assessee was using machinery in production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in deleting the addition made by Assessing Officer on account of disallowance of claim of additional depreciation. For this, Revenue has raised the following ground No.1:- 1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO on account of claim of additional depreciation of ₹ 9,45,450/-. 3. The brief facts are that the assessee engaged in the activity of embroidery works on fabrics on job work basis. According to the Assessing Officer the business of embroidery work on job work basis is not a manufacturing activity, hence, the additional depreciation claimed by assessee cannot be allowed and accordingly he made disallowance of addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his appellate order:- 3.3 I have considered the submission made by the appellant and the observation of the A.O. The case of the appellant is covered by the decision of the Hon ble Supreme Court in the case of S.S.M. Bros. Pvt. Ld. Others (243-ITR-418) wherein the Hon ble Supreme Court stated as under:- 6. When both the provisions are read together this is the result: where the machinery or plant is installed for the purpose of the business of production of textiles, including those dyed, printed or otherwise processed, made wholly or mainly out of cotton, the assessee is entitled to the deduction of the development rebate the under. What is important is that this development rebate is available if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are involved in embroidery activity and the same can be briefly categorized as under:- i) Creating a digitalized embroidery design file; ii) Editing the design and/or combining it with other design (optional); iii) Load the final design file into the embroidery machine; iv) Stabilize the fabric and place it in the machine; v) Start and monitor the embroidery machine; And because of the above process which has to be carried out in very careful manner the output i.e. embroidered fabrics has entirely different looks and has different commercial value and thus, because of above operations new commodity emerges. The expressions manufacture and produce have not been define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing machinery in production of processed textile i.e. embroidery work and thus, the fact embroidery work is regarded as production cannot be denied. Section 32(1)(iia) also used the word production of any article or thing and thus, the product with embroidery work is included in the work any article or thing. In fact the provisions of section 32(1)(iia) are larger in scope as compared to section 33(10(B)(b)(I) inasmuch as section 32(1)(iia) provides for additional depreciation on plant and machinery which is used in the production/manufacture of any article or thing whereas section 33(10(B)(b)(i) provides for development rebate on plant and machinery which is used in the construction, manufacture or production of any article or thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99 00 Of other textiles materials Kg. 8% As the issue is squarely covered in favour of the assessee, we allow the claim of the assessee. This issue of Revenue s appeal is dismissed. 6. The next issue in this appeal of Revenue is against the order of CIT(A) in deleting the addition made by Assessing Officer on account of disallowance of interest expenditure. For this, Revenue has raised the following ground No.2:- 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO on account of interest expenditure of ₹ 24,514/-. 7. Having heard the rival contentions and going th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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