TMI Blog2019 (1) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... e records whether the claim of the assessee is for the assets coming under Clause (xiii)(P) or Clause (xiii) (R) of the depreciation chart which refers to agricultural and municipal waste conversion device producing energy Clause (xiii) (P) or machinery and plant used in the manufacturing of agricultural and municipal waste conversion device Clause (xiii) (R) of the depreciation chart. Since the issue discussed above about the chargeability of depreciation on the cost price of CNC Drilling Machines goes to the root cause of the ground raised before us, the same needs to be examined afresh - Appeal of the assessee is allowed for statistical purpose - ITA No.394/Ind/2017 - - - Dated:- 10-1-2019 - MR KUL BHARAT, JUDICIAL MEMBER AND MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Shri R.P. Mourya, Sr. DR For The Assessee : Shri S.S. Solanki, C.A ORDER PER MANISH BORAD, AM. The above captioned appeal filed at the instance of assessee pertaining to Assessment Year 2011-12 is directed against the orders of Ld. Commissioner of Income Tax (Appeals)-I (in short Ld.CIT(A) ], Indore dated 08.03.2017 which are arising out of the order u/s. 143(3) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted against the disallowance of ₹ 20 146681/ - being claim of depreciation at the rate of 80%) on CNC Drill Machines disallowed. The detailed facts of the case as per the assessment order are reproduced at Para No. 2 above and the detailed submissions of the appellant are reproduced at Para NO.3 above. 5.1 The crux of the appellant's argument is that as the CNC Machines are used for the manufacture of pellet machine dies and the pellet machines are used for the production of biomass pellets which arc a renewable form of energy the CNC Machines are renewable energy devices used in conversion of agricultural and municipal waste. In view of the above they are eligible for higher depreciation as prescribed in the depreciation schedule under the Head Renewal energy devices listed in Clause 8(xiii) (p) (r}. The relevant part of the schedule is already reproduced at para No.2 above. 5.2 The CNC machine is simply a machining tool which works on the basis of a preprogrammed computer. It is thus like a robot doing the machining job. As per Wikipedia it is defined as under: Computer numerical control (CNC) is the automation of machine tools by means of compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... municipal waste and hence is not such a device and is also not a conversion device producing energy. It produces a die and the manufacture of the CNC Machine also cannot be termed as 'Agricultural and municipal waste conversion device producing energy'. lt also does not manufacture any of the items listed at 8(xiii) (a) to (q). 5.5 The logic given by the appellant is that as the CNC machine is for producing dies used in biomass pel1eti.zing machine and the pellets arc renewable energy it qualifies for the higher depreciation. This logic of the appellant is by adopting an interpretation which is not warranted from the language of the provisions In the case Orissa State Warehousing Corporation Vs CIT 237 ITR 589 (SC) it has been held as under; A fiscal statute is to be interpreted on the basis of the language used therein and not de hors the same. No words ought to be added and only the language used ought to be considered so as to ascertain the proper meaning and intent of the legislation. The court is to ascribe natural and ordinary meaning to the words used by the legislature and the Court ought not under any circumstances to substitute its Own impression an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lleting die is the device used for conversion of Agricultural waste into Fuel Pellets and the machine doing this is called as a pellet mill or a pellet machine and in turn the whole plant. The assessee company is making all three that is the pelleting dies, pellet mills and pellet plants. This very fact entitles the assessee to not only claim 80% depreciation on these Particular machines for making pelleting dies and pellet mills but on each and every installation on its premises. A Pellet Die is converting agricultural waste into pellet Fuel which is a form of energy. As such there is no doubt and confusion on the same falling in clause (xiii) sub clause (p) (r) of depreciation chart. The mention in point (5.3) and point (5.5) of the order passed by Assessing officer is as such not correct. We are providing list and also copies of their order. Please also refer their websites which clearly mention that they all produce pellet Fuel (which is a very popular form of energy). S. No Name of the Party Office Address Key Person Mob.No. E Mail Web site ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants along with all machineries and their parts. Department's contention is that the word 'Device' means a complete machine producing some form of energy. Our submission is that the word device means A thing made or adapted for a particular purpose, especially a piece of mechanical or electronic equipment Substantiated by its meaning on Google and various prominent dictionaries. Our submission is that we are making the parts, the machines and the plants as well. As such, disallowing only on the ground of common interpretation of a word also does not arise. That the intention of legislature for giving incentive in the form of higher rate of depreciation is to promote the manufacture of renewable energy saving devices and to protect environment as well. The AO, by disallowing the claim by taking a very narrow approach is frustrating the basic object of the legislature. As the assessee is producing dies used in pellet mills which produces pellets i.e. energy fuel, it is entitled to depreciation @ 80% as given in clause (xiii) P r. The disallowance of depreciation so made by AO on the basis of wrong findings is illegal and wrong. The same, therefore, require to be dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tting that the CNC Drilling machine are used to manufacture Pellet Mill die drills Pelletting dies which are further used for manufacturing agricultural and municipal waste conversion device. However it is not transcribing from the records whether the claim of the assessee is for the assets coming under Clause (xiii)(P) or Clause (xiii) (R) of the depreciation chart which refers to agricultural and municipal waste conversion device producing energy Clause (xiii) (P) or machinery and plant used in the manufacturing of agricultural and municipal waste conversion device Clause (xiii) (R) of the depreciation chart. Since the issue discussed above about the chargeability of depreciation on the cost price of CNC Drilling Machines goes to the root cause of the ground raised before us, the same needs to be examined afresh by the Ld. A.O in the light of the discussions made herein above. 12. We therefore in the given facts and circumstances of the case as well as the acceptance of both the parties, set aside the issues raised before us to the file of the Ld.A.O for denovo adjudication and hereby direct the Assessing Officer to examine the claim of depreciation on CNC drill machine in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
