TMI Blog2010 (7) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... s, purchased under TUFS of the Govt. of India. 2. It is therefore prayed that the addition of ₹ 16,46,849/- confirmed by the Hon. CIT (Appeals) may please be deleted . 2. Briefly, the facts of the case are that the AO disallowed depreciation of ₹ 16,46,849/- out of total depreciation of ₹ 36,27,189/- claimed @ 50% on plant and machinery under Technology Up-gradation Fund Scheme (TUF) for Textile and Jute Industries. In the assessment order the AO has stated that the assessee company is engaged in the business of manufacturing and trading of texturised yarn. The same activity was undertaken by the assessee company in the last year and unit was started in the month of March, 2004. The assessee purchased POY which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned DR reiterated the stand of the departmental appeal as is earlier argued by the learned DR in the case of Agarwal Rayons Pvt. Ltd. (supra). 4. On consideration of the rival submissions we are of the view that the issue is covered in favour of the assessee by the order of the Tribunal in several cases particularly in the case of Agarwal Rayons Pvt. Ltd. (supra) in which the submissions of the parties and findings of the Tribunal are reproduced as under: 5. The Ld. A.R. submitted that Tribunal has taken a view that texturising and twisting activities are part of the processing and are covered under Appendix-1 Part-A, III at Sr.No.6 which has been referred to by A.O. on page-4 of the assessment order. He referred to the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Bipinchandra Mohanlal Gajjar. Manufacturing of Yarn art silk cloth. . Fairdeal Filaments Ltd. Manufacturing of Grey Fabrics, Sizing, textile rising and twisting of yarn. 5. Agarwal Rayons P. Ltd. Manufacturing of Yarn. From the above table following inferences could be drawn. 1. All the four appellants were engaged in the composite activity of manufacturing of Yarn and art Silk Cloth. 2. They had separate unit for manufacturing of Yarn art Silk Cloth. 3. The yarn manufactured by them was used for captive consumption of the appellants themselves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conferred to any class or classes of appellants, the Act is categorical in classs or classes of appellants who are eligible to avail the special benefits. One such example is export benefit available to appellant exporting goods out of India u/s. 80HHC. The provision of sec. 80HHC also specifies allowability of deduction u/s. 80HHC to such supporting manufacturer subject to fulfillment of certain specific terms and conditions. Above facts squarely applicable to appeal under consideration. It is also humbly submitted that the view expresse by the Supreme Court in the case of IPCA Laboratories (266 ITR-521) which can act as guiding force in the instant case also. The Supreme Court opined in its order (supra) that an incentive pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out. However, distinction sought to be made by the Ld. D.R. is artificial and does not confirm to the language used in the Rules. In fact, texturising and twisting activities are part of processing. It is incorrect on the part of the A.O. to hold that language used in the rule confine processing of cloth only and not texturising and twisting of the yarn. The language used in rule -6 of block 3 of Appendix -1 of depreciation table reads as under:- Machinery and plant, used in weaving processing and garment sector of Textile Industry, which is purchased under TUFS .. from this it cannot be read that weaving and processing is provided by cloth so as to infer that it is only weaving and processing of cloth whose machineries are enti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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