Whether additional depreciation u/s 32(1)(iia) is available for plant & machinery purchased by rice mills. Whether the activity undertaken by rice & flour mills are considered as manufacturing/ production for sec 32?
09 September 2010
The Additional Depreciation on new Machinery or plant is allowed u/s 32(iia) to an assessee which is an Industrial Undertaking i.e. it should be engaged in the business of manufacture or production of any article or thing.
The term Industrial Undertaking has been used in several sections of the IT Act, however the same has not ben defined in the Act. The tem has elarorately been explained i the judgemetn rendered by Delhi High cour in the case of Ansal HSG & Construction Co. Ltd. V. CIT.
It was held in that case that :
Therefore, we are of the opinion that common sense approach will have to be adopted and those undertakings would qualify as industrial undertakings .which are involved in „manufacturing activity .
In your case, by no strectch of imagination , can it be said that the activity carried by the rice mill is a manufacturing activity and hence, additional depreciation would not be allowed.
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