TaxTMI 
TaxTMI 
2014 (1) TMI 1938
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....n "Whether the ITAT was justified in law in upholding the decision of the CIT(A) in allowing additional depreciation of Rs. 5,82,15,539/- treating the process of making skimmed milk powder from milk as "manufacture" or "production" without appreciating the fact that production of skimmed milk powder is nothing but milk without water content?" 2. We have heard learned counsel Mr. Ketan Parikh for the appellant and learned Senior Counsel Mr. Soparkar for the assessee respondent. 3. The assessee respondent had claimed an additional depreciation of Rs. 5.82 crores (rounded off) under section 32(1)(iia) of the Income Tax Act ("the Act" for short) on the ground that a new plant and machinery were installed at Mother Dairy. The the ....
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....tively dealt with the entire issue relying on the decision of the Apex Court rendered in the case of Aspinwall & Co.Ltd vs. Commissioner of Income-Tax reported in [2001]251 ITR 323 and other decisions to hold that the additional depreciation is allowable on new machinery or plant acquired and installed by the assessee respondent engaged in the business of manufacture and production. It also sought to rely upon the decision of its coordinate Bench rendered in the case of Commissioner of Income-Tax vs. Mehsana District Co-operative Milk Producers Union Limited (ITA No. 666/Ahd/2005), which as given to understand has not being challenged by the Revenue. 6. On hearing both the sides and on having considered the decisions of all the revenue a....
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....ry or plant acquired or installed after 31.3.2005. The assessee, in the instant case, had installed Mother Dairy plant at Gandhinagar for manufacturing milk powder and had accordingly claimed the additional depreciation under section 32(1)(iia)claimed for such powder plant to the tune of Rs. 4,00,95,506/- and for other plant and machinery and old powder plant respectively the sum of Rs. 53,807/- and of Rs. 1,80,66,227/- had been claimed, totaling to Rs. 5,82,15,539/-. The fact is not disputed that the appellant is engaged in the business of manufacturing of milk products and the assessee respondent had been assessed since many years on regular basis where the Revenue has at no point of time disputed the aspect of its being in the activity o....
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.... could be restored to the original product. This process involves four different stages namely (I) Standardization (ii) Preheating( iii)Evaporation and (iv) Spray dying, as noted in the order of Assessing Officer, they are as under:- "Standardization: The conventional process for the production of milk powders starts with taking the raw milk received at the dairy factory and pasteurising and separating it into skim milk and cream using a centrifugal cream separator. "Preheating: The next step in the process is "preheating' during which the standarised milk is heated to temperatures between 75 to 120C and held for a specified time from a few seconds up to several minutes. Evaporation: In the evaporator the preheate....
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.... made to the decision rendered in the case of Commissioner of Income-tax vs. Prabhudas Kishordas Tabacco Products P.Ltd reported in [2006] 282 ITR 568 (Guj), wherein it was held:- "9. The tests to ascertain whether an activity amounts to manufacture or production of an article or thing have been laid down and reiterated by various decisions of the apex court and this High Court. Broadly, the requirement is that the raw material must be, in the first instance, subjected to a process of such a nature that it cannot be termed to be the same as the end-product after the raw material undergoes the process of manufacture. In other words, the goods purchased as raw material should go in as inputs in the process of manufacture and the resu....