TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 531
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....eturn of income by admitting total loss of Rs. 8,56,40,672/-. The return field by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') and after following due procedure, assessment is completed under section 143(3), wherein the Assessing Officer disallowed additional depreciation of Rs. 5,93,23,320/-. In the assessment order, the Assessing Officer has observed that the activity of the assessee is re-drying and threshing tobacco for trading purpose. The raw material and the end product are tobacco only. Although, it involves some processing activity, no new and distinct object or article having a different name, chemical composition or integral structure is pro....
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....main business of the assessee is purchase of raw tobacco, re-drying and threshing of tobacco and selling the same, which is the part of the manufacturing process and the assessee is entitled for additional depreciation u/s.32(1)(iia) of the I.T. Act, 1961. The assessee in the Form 3CD, the nature of business has mentioned that 'threshing and re-drying of tobacco, trading of tobacco'. As per I.T. Act, 1961 sec,2(29BA) "manufacture" with its grammatical variations, means a change in a non-living physical object or article or thing:- (a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or (b) bringing into existence of a ne....
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....eported in (2001) ITR 323 (SC), it was held that the conversion of the raw berry into coffee beans was a manufacturing activity and the appellant was, therefore, entitled to the investment allowance under sec.32A. Though the Supreme Court of India has rendered the judgment regarding the allowability of investment u/s.32(iia) of the I.T.Act, applying the same analogy that the additional depreciation claim made by the assessee has to be allowed. In view of the detailed discussion of the facts and circumstances of the case and various court judgments, the assessee is entitled for additional depreciation u/s.32(1)(iia) of the I.T. Act. Hence, the disallowance made by the AO is dismissed and assessee's ground of appeal is allowed. " 4. O....
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....reshing of tobacco does not amount to manufacture which is eligible for additional depreciation under the provisions of section 32(iia) of the Act. The CIT(A) by following the decision of Hon'ble Madras High Court, in the case of CIT Vs. Premier Tobacco Packers Pvt. Ltd. (2006) 284 ITR 222, held that drying and threshing of tobacco leaves is manufacture and accordingly, entitled for additional depreciation as per the provisions of section 32(iia) of the Act. The relevant portion of the CIT(A) order is extracted below: "I have considered the submissions made by the appellant, gone through the order of the AO and heard the AR in person besides perusing all other material available on record. The AO has not allowed the appellant's claim on th....
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.... substantial questions of law that whether, in the facts and circumstances of the case, the Tribunal was right in holding that the appellant is entitled to deduction under s. 80HH? The High Court after holding that the issue involved in the above question is covered by the decision of the Supreme Court rendered in Aspin Wall & Co. Ltd. Vs. CIT, reported in (2001) 251 ITR 323 (SC), dismissed the reference. It is important to note here that the Apex Court in the case law cited above has observed that conversion of the raw berry into coffee beans was a manufacturing activity and the appellant was, therefore, entitled to the investment allowance under s. 32A. In view of the foregoing conclusion, the Court did not find any error in the order of ....