TMI Blog2015 (10) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... that when a change or series of changes are brought out by application of processes which take the commodity to the point where, commercially, it cannot be regarded as the original commodity but is, instead recognized as a distinct and new article that has emerged as a result of the process. Thus, in our opinion, the moment the assessee has carried the embroidery work, the character of sari had changed. It does not remain the original grey synthetic cloth. It has its independent market and value in the market other than the grey synthetic cloth. Thus, the learned AO failed to appreciate this aspect. We further, find that the ld.First Appellate Authority has appreciated the controversy in right perspective as well as followed the order of the ITAT, wherein, it has been held that the embroidery work is an activity of manufacture. In view of the above discussion, we do not find any merit in the appeal of the Revenue. - Decided in favour of assessee. - ITA No.1107/Ahd/2012, CO No.154/Ahd/2012 - - - Dated:- 21-8-2015 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER For The Revenue : Shri Pravin Kumar, DR For The Assessee : None OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oidery work on sarees dress materials which did not amount to manufacturing or production. I find that the A.O. did not allow the claim of additional depreciation of ₹ 32,89,9447- u/s. 32(l)(iia) as he was of the opinion that an activity of embroidery constitutes only value addition and cannot be considered as manufacture, a prerequisite for grant of additional depreciation. Aggrieved the assessee is in appeal. Before me, it has been argued that the embroidery on fabric amounts to manufacturing process and eligible for additional depreciation u/s. 32(l)(iia). It was further submitted that the issue is covered by the decision of the IT AT, Ahmedabad by its decision in the case of M/s. Aswani Industries, Surat (213/Ahd/2010, dated 29.10.2010) and Haripriya Processors Pvt. Ltd. (1569/Ahd/2010, dated 08.09.2009) wherein it was held that embroidery work done was an activity of manufacturing and entitled to additional depreciation u/s. 32(l)(iia). 2.1 I have gone through the facts of the case. There is no dispute regarding purchase and ownership of machinery as normal depreciation has been allowed. The only dispute is regarding grant of additional depreciation which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of CIT vs. M/s. Arihant Tiles Marbles Pvt. Ltd. reported in 320 ITR 79, India Cine Agency Vs. CIT reported in 308 ITR 98, CIT vs. Sesa Goa Ltd. reported in 271 ITR 331 and to the following decision of Hon ble Gujarat High Court can be made : (a) CIT vs. Neokarna reported in 137 ITR 879 (Bombay) (b) CIT vs. Anglo French Drug Co. Ltd. reported in 191 ITR 92 (Bom.) (c) CIT vs. Prabhudass Kishore Dass Tobacco Products reported in 282 ITR 568 (Gujarat). 10. Let us bring at home the meaning of expression manufacture and production as propounded in the various authoritative pronouncements of the Hon'ble Supreme Court as well as of Hon'ble High Court. 11. In the case of India Cine Agency, Hon'ble Supreme Court has considered the judgment rendered in the case of Sesa Goa (supra) and all other decisions on the point which contemplate the meaning of expression manufacture as well as production . The relevant discussion made by the Hon'ble Court reads as under: 2. As noted above, the core issue is whether activity undertaken was manufacture or production. 3. In Black's Law Dictionary (5th Edition), the word manufacture' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is one in relation to the manufacture. (See Collector of Central Excise v. Rajasthan State Chemical Works [1991] 4 SCC 473). x x x x x x x x x x x x x x x x x x x x x x 14. To put it differently, the test to determine whether a particular activity amounts to manufacture' or not is: Does a new and different good emerge having distinctive name, use and character. The moment there is transformation into a new commodity commercially known as a distinct and separate commodity having its own character, use and name, whether be it the result of one process or several processes 'manufacture' takes place and liability to duty is attracted. Etymologically the word 'manufacture' properly construed would doubtless cover the transformation. It is the transformation of a matter into something else and that something else is a question of degree, whether that something else is a different commercial commodity having its distinct character, use and name and commercially known as such from that point of view, is a question depending upon the facts and circumstances of the case. (See Empire Industries Ltd. v. Union of India [1985] 3 SCC 314). x x x x x x x x x x x ..... X X X X Extracts X X X X X X X X Extracts X X X X
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