TaxTMI 
TaxTMI 
2011 (9) TMI 205
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....i. Additional MIDC Industrial Area, Jalna iv. MIDC Waluj, Aurangabad v. Uppal Inddustrial Estate, Hyderabad 4. Assessee claimed additional depreciation under section 32(1)(iia) in respect of new plant and machinery acquired and installed by the assessee in an unit situated at MIDC Waluj, Aurangabad. The installed capacity of the said unit had increased from 23,000 numbers as on 31st March 2004 to 32,500 numbers as on 31st March 2005. Assessee accordingly claimed depreciation under the provisions of section 32(1)(iia), which was allowed by the A.O. vide order under section 143(3). Subsequently on examination of record the CIT considered that the A.O. has not examined the issue of additional depreciation correctly and invoked provisions of section 263 to set aside the assessment order dated 30.03.2007 with a direction to examine assessee's eligibility for additional depreciation under section 32(1)(iia) and to disallow if it was found that the conditions are not satisfied. This order of the CIT was not contested as it was only a direction given to the A.O. to examine the eligibility. However, the A.O. in the consequential proceedings examined the elig....
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....visions of section 32(1)(iia), the certificate issued by the Chartered Accountant and referred to the 'industrial undertaking' and 'new industrial undertaking' as per the provisions. He also referred to the proforma prescribed to submit that there is a distinction between assessee as a whole and a new industrial undertaking or existing industrial undertaking referred to in the provisions. Relying on the provisions of the Act and principles of law on the issue, it was his submission that additional depreciation was allowable qua industrial undertaking per se, i.e. unit, if it satisfies the conditions and not qua business of the assessee. 7. The learned D.R., however, relied on the orders of the CIT under section 263 and A.O. and the CIT(A) in the consequential proceedings. His contention that assessee having been in the business of manufacturing, the enhanced capacity can only be considered with reference to overall installed capacity of the company and not with one single unit. 8. We have considered the issue, the rival contentions and provisions of the act and relevant case law. It is on record that assessee is in the business of manufacturing various products such as needle....
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....utside 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 a deduction (whether by way of depreciation or other-wise) in computing the income chargeable under the head "Profits and gains of business or profession" of any one previous year: Provided also that no deduction shall be allowed under clause (A) or, as the case may be, clause (B), of the first proviso unless the assessee furnishes the details of machinery or plant and increase in the installed capacity of production in such form, as may be prescribed along with the return of income, and the report of an accountant, as defined in the Explanation below sub-section (2) of section 288 certifying that the deduction has been correctly claimed in accordance with the provisions of this clause. Explanation.-For the purposes of this clause,- (1) "new industrial undertaking" means an undertaking which is not formed,- (a) by the spli....
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....o be 1,00,000 tonnes, 1,65,000 tonnes, 1,00,000 tonnes and 1,00,000 tonnes, respectively, in respect of the newly erected klin at Kistna, the capacity of the newly constructed kiln alone was much more than the capacity of the entire factory which had been shown to be only 90,000 tonnes. The certificate also showed that several amounts running into several lakhs were spent in construction of building, purchase of plant and machinery, construction of water works and railway siding and tram lines, purchaser of rolling stock and expenses of electric installation which were necessitated by the construction of the new kilns at each of the four factories had resulted in an expansion of the factory itself, yet the new kilns were completely integrated units which could be put into production independently of the other units or production therefrom could cease without affecting the production from the other kilns. Moreover, all the four kilns at the four different factories had been established with the plant and machinery newly purchased and required exclusively for the purposes of the new kilns. Therefore, even though the business or the industrial establishment as a whole had been expande....
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....tooth paste, tooth brush, soap, cosmetics, etc. The entire business may have different units and different factories manufacturing different products at different places. If that company installs additional machinery with reference to production of tooth brushes and claims additional depreciation it is not possible to compare the increased capacity with reference to other products as different parameters exists. One can only compare similar products in a given situation. Thus examination of a condition for granting additional depreciation to an existing unit provided it increased installed capacity by not less than 10% can only be with reference to the products manufactured in that particular undertaking. As rightly submitted by the assessee this unit at MIDC Waluj, Aurangabad is manufacturing Needle Rollers Bushes & Cages, Ball and Roller Bearings and Automobile Components, which has been increased by 11.33%, 38.09% and 70% respectively and it has claimed additional depreciation on these machineries in that unit only. It so happened that assessee is manufacturing similar products at different places but that does not mean that comparison has to be made with production in different....
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....g up of a wind mill has nothing to do with the industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in s. 32(1)(iia). It cannot also be said that setting up of a windmill will not fall within the expression setting up of a new machinery or plant. There is no error in the conclusion of the Tribunal." As far as application of section 32(1)(iia) is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31st March 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed upto 31st March 2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. 14. It is a well settled principle of statutory interpretation that the words or expressions used by the Legislature should be given the normal meaning. Clause (iia) to sec. 32(1) as applicable to the A.Y. 2005-06 was insert....