TaxTMI 
TaxTMI 
2019 (7) TMI 856
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....products/sweets/namkeens. 3. Your appellant craves leaves to add, alter, amedn or forego any grounds of appeal at the time of hearing. 2. Briefly stated facts of the case are that the assessee company was engaged in the business of manufacturing and selling of "sweets" and "Namkins" through various restaurants or outlets. For the year under consideration the assessee filed return of income on 24/09/2011, declaring total income of Rs. 10,21,98,177/-. The case was selected for scrutiny and notice under section 143(2) of the Income-tax Act, 1961 (in short 'the Act') was issued and complied with. In the assessment completed on 21/03/2014 under section 143(3) of the Act, the Assessing Officer disallowed the claim of additional depreciation under section 32(1)(iia) of the Act on certain items of fixed assets. On further appeal, the Ld. CIT(A) upheld the disallowance on the grounds that: (i) firstly, those items were not installed at the factory premises; and (ii) secondly those items were not involved in the actual process of manufacturing of food products/sweets/Namkins etc 2.1 Aggrieved with the finding of the Ld. CIT(A), the assessee is in appeal befor....
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....rwise) in anyone previous year. 7. We find that in the year under consideration, the assessee claimed additional depreciation on following items of fixed assets: S.No. Date Description Addition Installed at 1. 30.06.2010 Top Sealer TS 150-123C 15,355/- Retail Outlet 2. 30.06.2010 Top Sealer TS 150-95C 15,35.5/- -do- 3. 07.08.2010 Top Sealer TS 150-123C 15,355/- -do- 4. 07.08.2010 Top Sealer TS 150-95C 15,355/- -do- 5. 09.08.2010 Top Sealer TS 150-123C 200/- -do- 6. 09.08.2010 Top Sealer TS 150-123C 15,355/- -do- 7. 11.08.2010 Canopy 10,x8'x6' 10,000/- -do- 8. 11.08.2010 Canopy 10'x8'x6' 1 1,47,900/- -do- 9. 19.10.2010 Top Sealer TS 300 5 Portion 31,125/- -do- 10. 31.08.2010 Lassi Machine 16,167/- -do- 11. 31.08.2010 Heavy Mixi 20,170/- -do- 12. 13.01.2011 Top Sealer TS 200-69-2C 19,505/- -do- 13. 13.01.2011 Top Sealer TS 150-123C 30,710/- -do- 14. 18.02.2011 Daal Grinder Mancing 26,500/- -do- 15. 25.09.2010 SS Trolly 36,760/- -do- 16. 25....
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....m doubting the activities of assessee, being that of manufacturer, has also objected, from the details of assets, that they are not installed in factory as the so called factory of the assessee is located at Lawrence Road and these items are utilized for offices or residential or show room purposes; that all of these items cannot be termed as plant & machinery e.g., the distribution penal at Faridabad is falling under the category of furniture & fixture and not under plant and machinery; that same is the case with other items also e.g. Air Conditioners are more in nature of office appliances rather than plant & Machinery; and that Inkjet printer installed at Faridabad is undoubtedly an office appliance and not plant & Machinery. It cannot be disputed that by virtue of proviso to section 32(1)(iia) of the Act, no additional depreciation is allowable the following eventualities. The relevant proviso reads as under : "Provided further that no deduction shall be allowed in respect of- (A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed i....
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....enue deserves to be dismissed, being devoid of merits." 9. On perusal of the above order of the Tribunal(supra) in the case of the assessee, we find that in para-7 the Tribunal has held the activity of the assessee as manufacturing and found the assessee eligible for claim of additional depreciation on plant and machinery. In paras-8 and 9, the Tribunal (supra) has held that the additional depreciation cannot be denied to the assessee for installing the items of the assets at retail outlets, because retail outlets are not either office promises or residential accommodation in the nature of the guesthouse as per the proviso to section 32(1)(iia) excluding the additional depreciation. In the year under consideration, also the items of fixed assets have been installed at various retail outlets and there is no dispute between the assessee and the Revenue on this factual aspect. Thus following the finding of the Tribunal, the additional depreciation in the year under consideration also cannot be disallowed on the ground that those items were not installed at the factory premises of the assessee. The second ground for rejection of additional depreciation is that these items are not....