TMI Blog2015 (10) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... the article produced would depend upon the kind of embroidery carried out on the synthetic cloth. The ultimate article produced may be an embroidered saree or an embroidered dress material or some other article. Therefore, there would be a transformation in the basic synthetic fabric on which embroidery has been carried out resulting into a new article which is commercially known as another article. Under the circumstances, the work of embroidery carried on by the assessee would fall within the ambit of definition of "manufacture" as envisaged under section 2(29BA) of the Act. The Tribunal, therefore, did not commit any legal error in holding that the activity carried on by the assessee falls within the ambit of manufacturing activity and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to the total income. The assessee in the year under consideration was engaged in the business of embroidery work on synthetic fabrics on job work basis. The Assessing Officer while disallowing the claim of additional depreciation held that embroidery work does not constitute manufacturing or production so as to be eligible for additional depreciation. According to the Assessing Officer, the embroidery work done on synthetic fabrics was merely value addition work which adds to the value of synthetic fabrics and should not be regarded as manufacturing or production. According to the Assessing Officer, the essential condition to claim additional depreciation was that there must be complete transformation of the item and entirely new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormed by the assessee was in the nature of job work only, making value addition on the product already in existence, the Assessing Officer had rightly disallowed the depreciation. It was submitted that reliance placed upon the decision of the Supreme Court in the case of S.S.M. Brothers (P) Ltd. v. Commissioner of Income-tax (Central) Madras (supra) was misplaced, inasmuch as, the said case related to development rebate under section 33(1)(b) of the Act. It was, accordingly, urged that the appeal deserves to be admitted on the question as proposed or as may be formulated by this court. 5. This court has considered the submissions advanced by the learned counsel for the assessee and has perused the impugned order passed by the Tribunal as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or thing, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed by way of deduction under clause (ii). Thus, section 32(1)(iia) of the Act provides for an additional depreciation of twenty per cent of the actual cost of machinery or plant acquired and installed after 31st March, 2005, provided the assessee is engaged in the manufacture of an article of thing. In the present case, undisputedly the assessee has purchased embroidery machines in the year under consideration and has used them for the purpose of his business. The dispute raised is that the embroidery work carried on by the assessee does not amount to manufacture or production of an article or a thing. The Tribunal has fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production of any article or thing. The Supreme Court in the case of S.S.M. Brothers (P) Ltd. v. Commissioner of Income-tax (Central) Madras (supra) has held that even if the assessee buys the cloth and then processes it, using the machinery, by embroidering it, and in some cases, by dyeing it, the assessee utilises the machinery in the production of processed textiles and therefore, the machinery is entitled to development rebate. 8. In the present case, the assessee carries on embroidery work on synthetic fabrics. When the assessee carries on embroidery work on the synthetic fabric, such synthetic fabric is converted into a new article, viz. embroidered synthetic fabric which is commercially known as another article. The nature of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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