TaxTMI 
TaxTMI 
2017 (11) TMI 901
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.... engaged in the business of manufacture of soft drinks, generation of electricity through wind mill and manufacture of pet bottles for packing of beverages. The assessee claimed additional depreciation on Visocooler amounting to Rs. 90,56,200/-( Rs. 41,67,159 + Rs. 4,88,904). The assessing officer disallowed the claim of additional depreciation. The assessing officer observed that these Visicoolers were kept at the distributors' premises and not at the factory premises of the assessee company. The assessee submitted before the AO that Visicoolers are required to be installed at the delivery point to deliver the product to the ultimate consumer in chilled form, therefore these are part of assessee's plant. However, the AO rejected the assessee's contention and held thatassessee is not carrying out manufacturing activity on the product of the retailer at retailer's premises and merely chilling of aerated water cannot be termed as manufacturing activity and even that chilling job is the activity of the retailer and not of the assessee. This way, the assessing officer has disallowed the assessee's claim of additional depreciation of Rs. 90,56,200/-. 4. Aggrieved by the order of the as....
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....installed in its manufacturing unit for the assessee company as it is necessary for supplying the soft drinks in its consumable state i.e. in a cold/chilled condition. ln effect, the manufacturing process of the assessee does not end at the factory but continues till the supply of the same to the consumer in the cold state for which visicoolers are an integral and necessaryrequirement. Therefore, visicoolers are part of the manufacturing process and part of plant and machinery. The assessee explained the provisions of section 43(3) of the lncome Tax Act, 1961,which reads as follows. Section 43. Definitions of certain terms relevant to income from profits and gains of business or profession. "ln section 28 to 41, and in this section, unless the context otherwise requires- (3) "plant includes ships, vehicles, books, scientific apparatus and surgical instrument used for the purpose of business or profession [but does not include tea bushes or livestock] [or buildings or furniture and fittings]" An analysis of the aforesaid provision i.e. Section 43(3) of lncome Tax Act, 1961 shows that the word 'plant' as defined therein includes any movable item/object which is used a....
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.... judicial authority it stands established that 'visicooler' in the assessee's case is a 'plant', which accelerates its trading activities & manufacturing process. The assessee also relied on the following judgments: ln CIT vs. Elecon Engineering Co, Ltd. reported in [1987] 166 ITR 66 (SC) it was held by the Hon'ble Supreme Court of lndia that "the word 'plant' in its ordinary meaning is a word import and it must be broadly construed having regard to the fact that articles such as books and surgical instruments were expressly covered within the definition of plant under Section 43(3) of the Act." The Court further held that "the word "plant" would include any article or object, fixed or immovable, Used by a businessman for carrying on his business." ln Commissioner of lncome-tax v. Saurashtra Bottlings Pvt. Ltd reported in [1988] 232 ITR 270 (Guj) it was held that "The provisions regarding depreciation allowance get attracted when a plant is used for the business of the assessee. The expression "plant" has not been extensively defined and Section 43(3) of the lncome-tax Act, 1961, provides only an inclusive definition, which was the effect of ....
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....he actual cost of such plant & machinery under lncome Tax Act, '1961 when: * A new machinery or plant (other than ships and aircraft), is acquired and installed after 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing. * The machinery or plant which before its installation by the assessee, was not used either within or outside lndia by any other person; or * The machinery or plant is not installed in any office premises or any residential accommodation, including accommodation in the nature of a quest house * The plant or machinery is not in the nature of an office appliances or road transport vehicles: or * The whole of the actual cost of the machinery or plant has not been allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head "Profits and gains of business or profession" of any previous year ln view of the above, the assessee submitted that it is already an established fact that 'visicooler' is a 'plant' incidental for manufacturing process in the concerned case. 5. Considering the above submissions of the assesse....
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.... course and for the purposes of business was upheld by CIT(A). Therefore, CIT(A) deleted the addition made by AO. 6. Not being satisfied with the order of CIT(A), the Revenue is in appeal before us. The Ld DR for the Revenue,has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. Whereas, the ld Counsel for the assessee has defended the order passed by the CIT(A). 7. Having heard the rival submissions, perused the material available on record, we are of the view that a close and careful perusal of the provision shows that the benefit of additional depreciation is available to an assessee engaged in the business of manufacture of article or thing upon the actual cost of plant & machinery. lt is therefore clear that the benefit is available on the plant & machinery only to those assessees who are manufacturers and it is not restricted to plant & machinery used for manufacture or which has first degree nexus with manufacture of article or thing. We note that the second condition cited by the AO in the impugned order is not borne from the provisions of Section 32(1)(iia) of ....