TMI Blog2015 (6) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... merely two different ways of construction. The same analogy, in our view, would apply to the present case also. In our view, it would not make any difference when the piles are constructed inside the bore at project site itself or the prefabricated piles are fitted into the bore, by producing the piles at a different place. Ultimately the assessee is executing his contract work of piling and the new machinery would enable him to complete the work fast, since the assessee could carry out boring work separately and the prefabricated piles could be prepared prior to boring work also. As observed earlier, it is not the case of the assessee that it is producing the prefabricated piles and selling them to outsiders. Hence, we are of the view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery used in the manufacture or production of an article or thing. The assessee, by referring to the definition of the term manufacture given in sec. 2(29BA) of the Act, contended that the pre-cast or pre-fabricated piles manufactured by using the new machinery results in manufacture of new article or thing. 3. The AO took the view that a Pile is constructed and it is not manufactured or produced. Accordingly the AO, by placing reliance on the decision of Hon'ble Supreme Court in the case of CIT Vs. N.C. Budharaja Co. Ors (204 ITR 412), held that the piling work cannot be treated as manufacturing activity. The AO also referred to the decision of Hon'ble Supreme Court rendered in the case of S.A. Builders Vs. CIT (289 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceeding year and in support of the same he submitted that the assessee has realised a turnover of ₹ 1.34 crores by using the MS Liner piles. Accordingly he submitted that the machinery was ready to use during the year under consideration and hence the AO has allowed normal depreciation. Accordingly he submitted that the Ld CIT(A) was not justified in denying additional depreciation on this ground. He further contended that the assessee is manufacturing prefabricated piles and the same is brought to the work site by paying applicable VAT and used for piling works and hence it is entitled for additional depreciation. 6. On the contrary, the Ld D.R submitted that the assessee is ultimately using the machinery for executing of piling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, a careful perusal of the provisions of sec. 32(1)(iia) extracted above would show that the additional depreciation is allowed to an assessee engaged in the business of manufacture or production of any article or thing . Admittedly the business of the assessee involves carrying out piling works and the said business cannot be considered to be a business of manufacture or production of an article or thing. Hence, in our view, the production of prefabricated piles which are going to be used by the assessee in its business of piling would form part of construction activity and hence the decision rendered by the Hon'ble Supreme Court in the case of N.C. Budharaja (supra) would squarely apply to it. The Ld A.R contended, by referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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