TMI Blog2015 (2) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... idery work and thus, the fact embroidery work is regarded as production cannot be denied. Since the assessee being engaged in embroidery work is entitled for additional depreciation - Decided in favour of assessee. Disallowance of office expenses - CIT(Appeals) partly confirming the action of Assessing Officer by sustaining disallowance to the extent ₹ 5,981/- - Held that:- No interference is required in the estimation as adopted by the Learned CIT(Appeals) for the year under consideration - Decided against assessee. - I.T.A. No.1965/Ahd/2011 - - - Dated:- 30-4-2012 - SHRI MUKUL Kr.SHRAWAT AND SHRI ANIL CHATURVEDI, JJ. For the Appellant : Shri Sapnesh Sheth, A.R. For the Respondent: Shri Samir Tekriwal, Sr.D.R. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per section 32(1)(iia). However, as per A.O., the assessee was not engaged in manufacturing or production activity, hence a letter was issued to the assessee requiring it to show cause as to why additional depreciation claim of ₹ 9,18,722/- should not be disallowed. Finally, the assessee s claim for additional depreciation of ₹ 9,18,722/- was disallowed. 3. The matter was carried before the first appellate authority. The ld.CIT(A) has upheld the action of the Assessing Officer by orbserving as under:- DECISION The arguments of the assessing Officer as well as the appellant have been considered. There is considerable force in the arguments of the Assessing Officer. The AO has correctly analyzed and proved that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chine; 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 defined in the Act at the relevant point of time but the dictionary meaning of manufacture is to transform or fashion 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 commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded 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)(l) 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 which is listed in the Fifth Schedule. In view of these facts and the decision of Hon'ble Supreme Court the additional depreciation claimed by assessee is required to be allowed as plant and machinery is used in the production of embroidery fabrics. I further find that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Co-ordinate Bench has taken a view in favour of the assessee by rejecting the Revenue s appeal, therefore, we have no reason to take any other view but to follow the view already taken, reproduced hereinabove. Resultantly the assessee being engaged in embroidery work is entitled for additional depreciation Consequently, the assessee s ground is hereby allowed. 6. Ground No. 2 reads as under: 2. On the facts and in circumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in partly confirming the action of Assessing Officer by sustaining disallowance to the extent ₹ 5,981/- as against ₹ 14,953/- made by Assessing Officer on account of office expenses. 6.1. Apropos to Ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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