Income Tax Appellate Tribunal - Delhi
Yfc Projects Pvt. Ltd., New Delhi vs Department Of Income Tax on 11 March, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH :I : NEW DELHI
BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER
AND
SHRI K.G. BANSAL, ACCOUNTANT MEMBER
ITA No.3082/Del/2010
Assessment Year : 2007-08
DCIT, Vs. YFC Projects Pvt. Ltd.,
Circle 18 (1), B-28, Shivalik,
Room No.211A, Malaviya Nagar,
CR Building, New Delhi.
New Delhi.
PAN : AAACF1998B
(Appellant) (Respondent)
Assessee by : Shri M.K. Kaul, AR
Revenue by : Shri N.K. Chand, Sr. DR
ORDER
PER I.P. BANSAL, JUDICIAL MEMBER
This is an appeal filed by the revenue. It is directed against the order of the CIT (A) dated 11th March, 2010 for assessment year 2008-08. Grounds of appeal read as under:-
On the facts and in the circumstances of the case, Ld. CIT (A) has erred in allowing additional depreciation on machinery u/s 32 (iia) of the Income Tax Act, 1961, ignoring the law laid down by the Hon'ble Supreme Court in the case of NC Budhiraja (204 ITR 412) that construction of a dam or for that matter a bridge, a road or a building or job work related thereto is not manufacturing or production of article.
2. The assessee is engaged in the business of construction of roads, houses and manufacturing of ready mix concrete. It claimed additional depreciation which is eligible for the units which are engaged in the 2 ITA No.3082/Del/2010 activity of manufacturing or producing any article or thing. According to the Assessing Officer, the decisions of Hon'ble Supreme Court in the case of N.C. Budhiraja (supra) is applicable, hence, the activity of the assessee of ready mix concrete does not fall within the ambit of activity of manufacturing or producing any article or thing. He, therefore, disallowed the claim of additional depreciation of ` 31,92,515/-. Ld. CIT (A) has allowed the claim of the assessee on the basis of decision of ITAT in the case of assessee itself for assessment year 2004-05 wherein it was held that the assessee was carrying on the manufacturing activity, therefore, entitled to additional depreciation on the machinery used for production of ready mix concrete. It is against such relief given by the CIT (A) the department is aggrieved, hence, in appeal.
3. Ld., DR, placing reliance upon the order of Assessing Officer, vehemently contended that the assessee cannot be said to be engaged in the activity of manufacturing or producing any article, hence, the claim of the assessee has wrongly been allowed by the CIT (A).
4. On the other hand, Ld. AR of the assessee, relying upon the earlier orders of the Tribunal in respect of assessment years 2004-05 and 2005-06 has contended that the issue has already been decided in favour of the assessee. He has produced before us copy of both the orders the details of which are as under:-
Assessment Year ITA No. Order dated
2004-05 4672/Del/2007 15.01.2010
2005-06 1701/Del/2010 23.07.2010
3 ITA No.3082/Del/2010
5. We have heard both the parties and their contentions have carefully been considered. After hearing both of them, we have found that this issue is covered in favour of the assessee by the aforementioned earlier orders of the Tribunal. For the sake of completeness, para 7 of the order for assessment year 2004-05 is reproduced below:-
"7. In the light of above judgment, if we examine the activity of the assessee then it would reveal that preparation of RMC is not as simple as construed by the learned CIT(Appeals). The assessee has been carrying out this activity in an organized manner with the help of heavy machinery and computer. Its activity is not as simply as mixing of sand, cement etc. by a labourer on the right side. Though in the common parlance, sometime it does not sound logic to say that mixing of R.M.C. is a manufacturing activity but if we look into this activity carried out by the assessee from the point of an expert who has laid down BIS standard placed on the paper book then it would indicate that it is a complicated affairs. The mixing of four products in prescribed ratio would result a different identifiable product which cannot be reconverted to its original shape. Hon'ble Supreme Court in the case of India Cine (supra) has considered cutting of a jumbo films rolls into small piece of films a manufacturing activity. If we analysis the facts of assessee's case, as per the ratios of Hon'ble Supreme Court's decision then its case is on a better footings. Therefore, we are of the opinion that Learned Revenue Authority have erred in holding that assessee is not carrying out any manufacturing activity. We allow the first issue raised by the assessee and pleaded in ground Nos. 3 to 5. We direct the Assessing Officer to allow additional depreciation on machinery used for the production of ready mixed concrete.
6. Therefore, the present appeal is decided against the revenue.
7. In the result, the appeal filed by the Department is dismissed.
The order pronounced in the open court on 19.11.2010.
Sd/- Sd/
[K.G. BANSAL] [I.P. BANSAL]
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated, 19.11.2010.
4 ITA No.3082/Del/2010
dk
Copy forwarded to: -
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT
TRUE COPY
By Order,
Deputy Registrar,
ITAT, Delhi Benches