TaxTMI 
TaxTMI 
2021 (4) TMI 573
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....en in different context. The learned CITA have completely ignored a direct case law of the Supreme Court which is in favour of the assessee. 4) That the learned CITA is totally biased by the decision of the learned AO and completely ignored the submissions of the assessee that it is engaged in the production activities by installing the required plant and machinery in its industrial undertaking and having received registration from various govt, agencies for production/processing activities of exportable prawns and accordingly entitled for additional depreciation. 5) That the above orders of the Assessing Officer and Commissioner of Income Tax (Appeals) confirming the action of the Assessing officer, are illegal and against the intention of the law and liable to be deleted on the above grounds and such other grounds to be argued at the time of hearing of the facts and circumstances of the case. 2. Brief facts of the case are that the assessee company derives income from the business of Sea foods/Prawn culture/Production and export and filed its return of income electronically on 24.09.2009 for the assessment year 2009-2010 declaring total income at Rs. 61,31,758/- . The assess....
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....3(3) of the IT Act where the Ld. AO has determined the total income at Rs. 69,10,310/-, thereby making an extra addition of Rs. 7,78,552/-. That, the case has again reopened U/s. 147 of the IT Act on the basis of the report of the audit wing which leads to the satisfaction of the Ld. AO as the Ld. AO has failed to examine the additional depreciation of Rs. 15,71,130/- on the plant and machinery utilized for the purpose of manufacturing-cum-processing of prawns being cultivated from the ponds of the appellant company and also raw prawns purchased from the market for export. Besides this, there was other anomalies in the original assessment order as pointed out by the audit wing for which necessary clarification was sought for by the Ld. AO. The appellant company has explained all the anomalies arising out of the original assessment escaped from the original assessment. The Ld. A.O. has satisfied all the queries except disallowance of excess depreciation(additional depreciation) claimed at Rs. 15,71,130/-. That, the Ld.AO has cited the reasons for disallowance of excess depreciation while considering the balance sheet for the period 31st March'2009 as follows:- Total deprec....
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.... conclusion without considering. these processing or manufacturing aspects of raw prawns changed to edible form for human consumption, thereby committed error in law and in fact which needs judicial interference for the ends of justice. A-l. Besides the above, as stated, the audited balance sheet and books of accounts would completely justify and fortify the contentions of the Appellant Company in grown from it's own culture and purchased from market of raw Prawns and in turn converted to edible purpose for consumption of human beings by various processes of manufacturing or production for which processing and manufacturing unit was set up for this purpose since March, 2008. A-2 The Learned CIT has disallowed the entire deduction on the ground that the company is not eligible for the additional depreciation since the process involved in the plant is not 'manufacturing' and has sighted the decision of Honble Supreme court in the matter of M/s Sterling Foods V. State of Karnataka. We submit here that the learned CIT has erred in his conclusion and denied the deduction due to following reasons: The objective of the provision of Additional Depreciation as reflected ....
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....d to production or not. Therefore, this decision of this Hon'ble Supreme Court is totally irrelevant for the matter and facts of the assessee in claiming additional depreciation. The judgment have been given in connection with commercial tax matters and to determine whether after the processing, the product still holds it's original character to enjoy the benefits under respective commercial Tax Acts. In this context, we shall site the decision of Hon'ble Supreme Court in the matter of M/s. Cine India Agency Vs. Commissioner of Income Tax, Madras and enclosing herewith a copy of this decision. It may kindly be seen that Hon'ble Supreme Court in this matter has defined the meaning of word manufacturer/production as follows. "Production' with its grammatical variations and cognate expressions; includes- (i) Packing, labeling, relabeling of containers. (ii) Re-packing from bulk packages to retail packages, and (iii) The adoption of any other method to render the product marketable. 'Production' in relation to a feature film, includes any of the activities in respect of the making thereof. (Cine Workers and Cinema Theatre Workers (Regulations ....
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....le Tribunal. In addition to the above written submissions, ld. AR also relied on the judgment of the coordinate bench of the Tribunal in the case of M/s Bikanervala Foods Pvt. Ltd., ITA No.4139/Del/2014, order dated 04.05.2018. 6. On the other hand, ld. DR relied on the orders of the authorities below and submitted that the CIT(A) has rightly upheld the addition after relying the judgments of Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Sri Venkateswara Hatcheries (P) ltd. and the assessee is not engaged in the manufacturing activities, therefore, he is not entitled to additional depreciation as per Section 32(1)(iia) of the Act. 7. After considering the submissions of both the sides and perusing the entire material available on record, we observe that the assessee is engaged in the business of processing, packaging and exporting etc. We found substance on the written synopsis submitted by the ld. AR of the assessee and the case law relied on by the ld. AR. We have carefully perused the observations of the coordinate bench of the Tribunal in the case of M/s Bikanervala Foods Pvt. Ltd (supra), wherein the Tribunal observed that additional depreciation is allowable u/s....
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....lation by the assessee, was used either within or outside 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 ITA No. 4139/Del./2014 9 (D) any machinery or plant, the whole of the actual cost of which is 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 one previous year; " 9. In view of the aforesaid proviso, no additional depreciation is, inter alia, allowable to any assessee, even engaged in the manufacturing business, if the plant and machinery is installed in any office premises or any residential accommodation, including any guest house. It is also clear from the above proviso that no such deduction is permissible on any office appliances or road transport vehicles. Therefore, applying the above provisions, the claim of assessee is required to be tested. The assessee, as stated above, is engaged in manufacturing of sweets, as the assessee is engaged in the manufacturing....