DCIT 10(2), MUMBAI vs. SUPREME TREVES P.LTD, MUMBAI

आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, “ई” ” ” ” खंडपीठ खंडपीठ मुंबई मुंबई आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण खंडपीठ खंडपीठ मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI-“E”,BENCH सव"ी सव"ी सव"ी राजे"" सव"ी राजे"" राजे"", लेखा राजे"" लेखा लेखा सद"य लेखा सद"य सद"य एवं सद"य एवं एवं संदीप एवं संदीप संदीप गोसांई संदीप गोसांई गोसांई, "याियक गोसांई "याियक "याियक सद"य "याियक सद"य सद"य सद"य Before S/Sh. Rajendra,Accountant Member & Sandeep Gosain,Judicial Member आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं/.ITA No.3329/Mum/2014 ,िनधा"रण अपील िनधा"रण िनधा"रण वष" िनधा"रण वष" वष"/Assessment Year-2009-10 वष" DCIT-10(2) M/s. Supreme Treves Pvt. Ltd. Room No.432/474, 4th Floor, vs. Supreme House, Plot No.110 16th Road, Chembur Aayakar Bhavan, M.K. Road Mumbai-400 020. Mumbai-400 071. PAN No. AACCS 4085 Q (अपीलाथ" /Assessee ) (""यथ" / Respondent) िनधा"रती िनधा"रती ओर ओर सेसेसेसे/Assessee by :S/Shri Akram Khan and िनधा"रती िनधा"रती ओर ओर Bhaumik Sanghavi-(AR) राज"व क" ओर से/ Revenue by :Sh. M.M. Utture -(DR) सुनवाई सुनवाई क" क" तारीख तारीख / Date of Hearing :04- 11 -2015 सुनवाई सुनवाई क" क" तारीख तारीख घोषणा क" तारीख / Date of Pronouncement :01.01.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य लेखा सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the order dt.14.02.2014, of the CIT(A)-21,the Assessing Officer(AO) has filed the present appeal. Assessee-company,engaged in the business of manufacturing of automobile interior trim parts and other objects filed its return of income on 25/09/2009 declaring total income at Rs73,150/-. The AO completed the assessment u/s. 143 (3) on 8.12.2011 determining income of the assessee at Rs.3,85,38,544/-. 2.The first effective ground of appeal is about disallowing additional depreciation of Rs.9, 98,862/-on electrical installations.During the assessment proceedings the AO found that the assessee had debited to the P&L account an amount of Rs.9.98 lakhs under the head additional depreciation.The AO held that the additional depreciation was allowable only on the machineries and not on electrical installations. 3.Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA).Before him it was argued that details of electrical installations were made available to the AO.After considering the submissions of the assessee and the assessment order,the FAA held that similar issue was considered in the cases of Tribeni Tissues Ltd.(206 ITR 92) and Mahavir Spg. Mills Ltd.(171 Taxmann 371),that the Hon’ble Calcutta and the P &H High Courts had held that motors, electrical installations, underground cables, overhead cables were part and parcel of electrical machineries used for manufacture, that the assessee was eligible for additional depreciation. 4.Before us,the Departmental Representative(DR)supported the order of the AO and the Authorised Representative(AR)relied upon the order of the FAA.We have heard the rival submissions.We find that the issue before us is covered by the judgment of the Hon’ble Calcutta High Court of Tribeni Tissues Ltd.(supra).Facts of the case were that the assessee claimed investment allowance under section 32A of the Act on motors,electrical installations, underground cables,air-conditioning machines,tubewells and weighing machines.The AO rejected the claim on the ground that the electrical machines were in the nature of additional equipment and accessories which were not used in the actual manufacturing process. The FAA allowed the appeal of the assessee holding that these items were plant and machinery

3329/M/14Supreme for the purpose of manufacture and that the plant and machinery installed in the factory functioned as an integral part of the chain of manufacturing process.The Tribunal upheld the order of the FAA.In the appeal the Hon’ble High Court held as under: The expression "plant" is not defined in the Income-tax Act, 1961. The definition that is available in section 43(1) of the Income-tax Act, 1961, is merely an inclusive one and not exhaustive, but the courts have given the expression a meaning of the widest amplitude. It includes whatever apparatus is used by a businessman for carrying on his business not being his stock-in-trade. It can thus encompass all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business”..... the Assessing Officer had made a demarcation as between machines and equipment used directly in the manufacturing process and machines and equipment used in the accessory part of the manufacturing process. Such division of the manufacturing process did not stand to reason or practicality. One may or may not conceive of certain parts or stages of the process as principal process and the rest as accessory process but that makes no difference to the fact that all processes taken together constitute an indivisible integral process. As a matter of fact, all machinery and equipment that is necessary to make the assessee's manufacturing unit in a state of operational integration pertain to its manufacturing process, because there could not be any manufacture unless this operational integration was achieved after installation of the plant and the plant goes operational. Therefore, any machinery or plant having a link, however minor, in the total process of the operational integration should be taken as machinery or plant pertaining to the manufacturing process. Therefore, the assessee was entitled to investment allowance under section 32A on motors,electrical installations, underground cables, overhead cables and air-conditioning machines.

Respectfully following the above judgment,we decide ground no.1 against the AO.

3329/M/14Supreme

आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत