TaxTMI 
TaxTMI 
2017 (5) TMI 1685
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....depreciation. 3. The learned CIT(A) ought to have considered that no Certificate under Rule 5A in form 3AA signed by either a Chartered Accountant or any person entitled to be appointed to act as an Auditor as per provision of Sec.226, subsection (2) of Companies Act, 1956 has been filed. 4. The learned CIT(A) ought to have considered that the production capacity in any manufacturing industry consists of three ingredients namely (1) license capacity, (ii)installed capacity and (iii) utilized capacity. 5. The learned CIT(A) ought to have considered that the above subject matter had not been vouched for by the Appellant /Chartered Engineer. 6. For these and other grounds that may be adduced at the time of hearing, the order of the CIT(Appeals) may be canceled and that of the Assessing Officer restored. 2.0 Delay: There was delay of three days in filing the appeal for the AY 2003- 04 and the AO has filed condonation petition. The Ld AR did not make any objection for condonation. We have perused the condonation petition and both sides and condone the delay. 3.0 The issues involved in the Assessment Years 2003-04 & 2004-05 are common. T....
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....talled capacity as on 31.3.02, as 1800 tonnes by mistake. As noted by us about, there could not have been a situation of no increase in the installed capacity despite substantial income on the plant and machines , nevertheless it was duty of the assessee to prove that such increase exceeded 25%, as laid down in proviso (B) to clause-2 of sub section (1) of section 32, as it applied for relevant previous year. Assessing Officer never put to the assessee any question as to why the installed capacity remained stagnant despite substantial increase in its plant and machinery. No doubt, before the CIT(A) assessee had made a sincere endeavour to show that there was substantial increase in installed capacity, but nevertheless could not quantitatively show how it exceeded 25%. Be that as it may, we have to take into consideration peculiarilies of the business of an assessee before applying the provisions of the Act, which are benefical to the assessee. Assessee in this case is manufacturing machinery which undoubtedly were unique to each of its customers being custom built. Non homogenous product and non repetitive nature would make measurement of the installed capacity a subjective affair.....
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....* Cast iron is the material considered for calculation of M.R.R. The M.R.R. is depending on horse power of the machine and spindle RPM. * The horse power of the machine is defined in kilowatt. The technical team of the appellant company worked out the MRR for horizontal machine centres and also MRR for vertical machine centres. 5.3 The technical team of the appellant company worked out the Material Removal Ratio for horizontal machine centres and also Material Removal Ratio for vertical machine centres in terms of of cm3 /minute. On working out the capacity increase in horizontal machining centre based on M.R.R. and additional tools, the capacity increase was 29.2% over the capacity as on 31.3.2002. Similarly, the Material Removal Ratio on other machineries like turning centre, milling machine, Zig boring machine, the percentage of capacity increase was 73.2%. The total capacity increase over the capacity as on 31.3.2002 was worked out at 53.8%. While working out the Material Removal Ratio, the installed date of machinery, the Horse power of the machinery, number of machines and cast iron material removal (cm3 /minute), the total working hours in a day based on th....
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....gns composition of various specifications and it is involved in lathe work. Since the company is manufacturing and involved any number of items which will be difficult to count to increase any capacity in numbers by introduction of new plant and machinery. The increase in plant and machinery was more than 50% and there was a substantial increase in power consumption production and other components and the assessee also produced Chartered Engineers Certificate as additional evidence which was admitted by the Hon'ble ITAT and remitted the matter back to the file of the AO but unfortunately the AO neither considered the increase in various items of expenses and production for increase in capacity nor considered the Chartered Engineers Certificates. The Ld.CIT(A) has rightly considered the issue and allowed the appeal and no interference is called for. 5.0 We heard the rival submissions and perused the material placed on record. The assessee has claimed the additional Depreciation u/s 32(1)(iia). The assessing officer disallowed the additional Depreciation and the matter travelled up to ITAT and the ITAT remitted the matter back to the file of AO to consider any additional eviden....