TaxTMI 
TaxTMI 
2022 (2) TMI 433
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....ional depreciation claimed u/s 32(1)(iia) of the Income-tax Act,1961 ['the Act' for short]. b) Disallowance of deduction claimed u/s 80P(2)(e) of the Act. 2. The facts relating to the case are stated in brief. The assessee is a co-operative society engaged in processing of milk and manufacturing of dairy products such as butter, ghee, pedha, etc. The assessment in the hands of the assessee for the year under consideration was completed by disallowing part of claim of additional depreciation and also deduction claimed u/s 80P(2)(e) of the Act. The Ld. CIT(A) confirmed both the disallowances and hence the assessee has filed this appeal before us. 3. The first issue relates to disallowance of claim of additional deprecia....
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....nufacture". With regard to the decision rendered by special bench in the case of B.G. Chitale (supra), he submitted that the above said decision was rendered in the context of section 80HHC of the Act and further the definition of the term "manufacture" was not available in the Act at that point of time. He further submitted that the Visakhapatnam bench of ITAT has held in the case of Tirumala Dairy Pvt. Ltd. Vs. ACIT (ITA No.153/Vizag/2009 dated 11.8.2021) that the processing for pasteurized and standardized milk was eligible for deduction u/s 80IB of the Act. 5. In the alternative, the Ld. A.R. submitted that the assessee is also engaged in the business of manufacture of ghee, pedha, butter, etc. The A.O. himself has allowed additional....
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....reads as under: "(iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii)" : A careful perusal of the above said provision would show that the above said provision only states that the assessee claiming additional depreciation u/s 32(1)(iia) of the Act 'should be engaged in the business of manufacture or production of any article or thing e....
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....nery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to twenty per cent. of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii):" 19. A bare reading of the aforesaid provisions shows that the new machinery or plant should be used by an assessee engaged in the business of manufacture or production of any article or thing and the new machinery or plant need not be used in manufacture or production of any article or thing. The learned counsel has before us relied on the decision of the Hon'ble Madras High Court High....
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....ovision contained in section 32(1)(iia ). In the light of the aforesaid decision, we are of the view that one of the basis on which the revenue authorities disallowed the claim of the Assessee for disallowance of additional depreciation cannot be sustained." 8. Hence, we are convinced with the alternative contention of the assessee. We have earlier noticed that the A.O. has allowed additional depreciation on machineries used for manufacture of butter, ghee, pedha, etc., which clarifies that the assessee is engaged in the business of manufacture or production of any article or thing. Hence, as per the ratio laid down by coordinate bench in the case of Texas Instruments Ltd. (supra), the assessee would be eligible for additional depreciati....
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....ived from letting of "godowns or warehouses" alone are eligible for deduction u/s 80P(2)(e) of the Act. Accordingly, he held that the milk parlours shall not fall under the category of godowns or warehouses and hence, the rental income derived from letting of milk parlours will not be eligible for deduction u/s 80P(2)(e) of the Act. Accordingly, he rejected the claim and the Ld. CIT(A) also confirmed the same. 12. We heard the parties on this issue and perused the record. The Ld. A.R. submitted that the milk parlours facilitate selling of milk and as per the object of deduction granted u/s 80P(2)(e) of the Act, facilitating the marketing of the commodities would also be covered. 13. On the contrary, the Ld. D.R. submitted that the fac....