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TMI Blog2017 (2) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 for AY 2006-07 on the following grounds: 1:0 Re.: Validity of re-assessment proceedings:- 1:1 "The Commissioner of Income Tax (Appeals) has erred in upholding the re-opening of the Appellant's assessment u/s. 148 of the Income-Tax Act, 1961. 1:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the re-opening of assessment u/s. 148 was in excess of jurisdiction and the Commissioner of Income-Tax (Appeals) ought to have held as such. 1:3 The Appellate submits that the proceedings u/s 148 of the Act were not in accordance with law and consequently ought to be struck down. Without prejudice to the foregoing: 2:0 Additional depreciation on diagnostic/service equipmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... backgrounds and the facts with regard to the issue on merits are that during year assessee was engaged in the business of pharmaceuticals, nutritional and diagnostic products. The assessee claimed additional depreciation of Rs. 1,63,85,522/- on the medical equipments which were placed by the assessee at the premises of its clients i.e. hospitals at their disposal for use of patients of these hospitals. During the course of assessment proceedings, the AO disallowed the impugned additional depreciation claimed by the assessee on these medical equipments on the ground that assessee was neither manufacturing anything directly nor producing any article or thing, whereas additional depreciation was allowable u/s 32 (1) (iia) of the Act only to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee, was used either within or outside India by any other person, or (B) Any Machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) Any office appliances or road transport vehicles; or (D) Any machinery or plant, the whole of the actual cost of which is allowed as deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head 'Profits and gains of business or professions' of anyone previous year.' The Ld. AR submits that the assesse has been engaged in manufacturing activities, and since vaporizers are not installed at its office premises, the sum is qualified for additional depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 32(1)(iia) of the Act as concern, the assesse is required satisfy the stipulated conditions in order to claim additional depreciating. We observe that in para 23.2 of the final order passed by the Ld. AO, the factual position in respect of the machinery, has been provided vis-à-vis the conditions u/s 32(1)(iia) of the Act. The Ld. AO, has disallowed the additional depreciation only on the ground that the assesse has been into trading activity. Apart from the manufacturing activity carried on by the assesse, it also provides health care solutions. The vaporizers, purchased by the assesse are retained by the assesse itself. 10. In our considered opinion, section 32(1)(iia) does not state that setting up of a new machinery or a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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