Deputy Commissioner of Income Tax, Circle-4(1)(1), Bangalore V. M/s. JSW Steel Processing Centres Ltd, Bangalore

ITA 1978/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5500 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 10-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Additional depreciation; Additional evidence
• Section: 32

Judgement Text

ITA.1978 & 2001/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1978/BANG/2017 (ASSESSMENT YEAR : 2013-14) DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4(1)(1), BENGALURU .. APPELLANT V. M/S. JSW STEEL PROCESSING CENTRES LTD, NO.121, THE ESTATE, DICKENSON ROAD, BENGALURU 560 042 .. RESPONDENT PAN : AABCJ7646P I.T.A NO.2001/BANG/2017 (ASSESSMENT YEAR : 2013-14) (BY THE ASSESSEE) ASSESSEE BY : SHRI. K. KOTRESH, CA REVENUE BY : SMT. PADMAMEENAKSHI, JCIT HEARD ON : 01.03.2018 PRONOUNCED ON : 07.03.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THESE ARE CROSS APPEALS FILED BY THE REVENUE AND T HE ASSESSEE RESPECTIVELY AGAINST THE ORDER OF THE CIT (A)-4, BE NGALURU, DT.18.07.2017, FOR THE ASSESSMENT YEAR 2013-14. ITA.1978 & 2001/BANG/2017 PAGE - 2 REVENUES GROUNDS : 2. ON FACTS OF THE CASE, WHETHER THE DECISION OF TH E LD CIT (A) IS RIGHT IN ALLOWING THE APPEAL OF ASSESSEE ON PERU SAL OF ADDITIONAL DETAILS FURNISHED BEFORE THE APPELLATE A UTHORITY WITHOUT GIVING OPPORTUNITY TO THE AO TO VERIFY THE SAME ON THE ISSUE OF EXCESS CLAIM OF REPAIRS AND MAINTENANCE, A DDITION ON ACCOUNT OF PROVISION MADE / NON DEDUCTION OF TDS U/ S.40(A)(IA) AND PROVISION OF OUTSTANDING LIABILITY. 3. ON FACTS OF THE CASE, THE LD CIT (A) HAS ADMITTE D THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE TH E CIT (A) ON ALL THE ISSUES WITHOUT GIVING OPPORTUNITY TO THE AO. H ENCE, VIOLATED THE PROVISIONS OF RULE 46A OF THE IT RULES. ASSESSEES GROUNDS ARE AS UNDER : ITA.1978/BANG/2017 REVENUES APPEAL : 02. THE EFFECTIVE GROUND RAISED BY THE REVENUE ARE GROUNDS 2 AND 3 AS REPRODUCED HEREIN ABOVE. IN THIS REGARD IT WA S SUBMITTED BY THE LD. DR THAT THE CIT (A) WITHOUT AFFORDING AN OPPORT UNITY OF HEARING AND WITHOUT CONFRONTING THE DOCUMENT FILED BY THE ASSESSEE ITA.1978 & 2001/BANG/2017 PAGE - 3 DURING THE APPELLATE PROCEEDINGS BEFORE HIM HAS ALL OWED THE CLAIM OF THE ASSESSEE WITH RESPECT TO MANPOWER SUPPLY AND SERVICE EXPENSES U/S.37 OF THE ACT AND IN THE ALTERNATIVE U /S.40(A)(IA) OF THE ACT, TO THE EXTENT OF RS.8,27,739/-. 03. ON THE OTHER HAND THE LD. AR HAS SUBMITTED THAT THE ASSESSEE HAS PRODUCED THE BILLS TO THE EXTENT OF RS.9,28,510 /- AS AGAINST RS.17,56,249/- . COPY OF THE LEDGER EXTRACT AND TH E PROVISION MADE THEREIN AND THE BILLS WERE ENCLOSED ALONG WITH THE COPY OF THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT (A). 04. WE HAVE HEARD THE RIVAL CONTENTIONS AN PERUSED PARA 6.3 OF THE CIT (A)S ORDER. IT IS ABUNDANTLY CLEAR THAT THE C IT (A) HAS ALLOWED THE CLAIM OF RS.8,27,349/- BASED ON THE LEDGER EXTR ACT AND THE BILLS FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDI NGS AS ANNEXURE C. HOWEVER AT THE TIME OF ASSESSMENT THE ASSESSEE HAS FAILED TO PRODUCE THE BILLS AND FURTHER FAILED TO CORROBORATE THE OTHER FACTS AS MENTIONED IN PARA 3.2 OF THE ASSESSMENT ORDER. AS THE CIT (A) HAS FAILED TO PROVIDE OPPORTUNITY TO THE AO OR HAS FAIL ED TO PROCURE THE REMAND REPORT FROM THE AO AND THUS AS ARROGATED THE POWERS OF DECIDING THE DISPUTE WITHOUT CONFRONTING IT WITH TH E ASSESSEE, THERE IS CLEAR VIOLATION OF RULE 46A OF THE IT RULES AND ACCORDINGLY THE MATTER IS REMANDED BACK TO THE FILE OF THE CIT (A) AND WE CANCEL THE ORDER OF THE CIT (A) WITH RESPECT TO GRANT OF RELIE F TO THE EXTENT OF RS.8,27,739/- AS MENTIONED IN PARA 6.3 OF THE CIT ( A)S ORDER. THE CIT (A) IS DIRECTED TO DECIDE THIS GROUND AFRESH AF TER AFFORDING OPPORTUNITY OF HEARING TO THE AO AS WELL AS TO THE ASSESSEE IN ACCORDANCE WITH LAW. REVENUES APPEAL IS ALLOWED. ITA.1978 & 2001/BANG/2017 PAGE - 4 ITA.2001/BANG/2017 ASSESSEES APPEAL : 05. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUT INY AS THE ASSESSEE CLAIMED ADDITIONAL DEPRECIATION OF RS.46,6 3,950/-, U/S.32(1)(IIA) OF THE ACT. THE AO IN PARA 4.1 HAS CONSIDERED THE ISSUE OF ADDITIONAL DEPRECIATION AND AFTER CONSIDER ING THE SUBMISSION OF THE ASSESSEE HAS DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION TO THE EXTENT OF RS.46,63,950/-. PARA 4.4 OF THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER : ITA.1978 & 2001/BANG/2017 PAGE - 5 FEELING AGGRIEVED BY THE ORDER PASSED BY THE AO, AS SESSEE FILED APPEAL BEFORE THE CIT (A). 06. THE CIT (A) HAS CONFIRMED THE ORDER PASSED BY T HE AO AND THE REASONING GIVEN BY THE CIT (A) IN PARA 8.3 IS A S UNDER : ITA.1978 & 2001/BANG/2017 PAGE - 6 FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BE FORE THE TRIBUNAL. 07. BEFORE US THE ASSESSEE CONTENDED THAT THE ACTIV ITY OF THE ASSESSEE FALLS WITHIN THE DEFINITION OF MANUFACTUR E AS DEFINED IN SECTION 2(29)(BA) OF THE ACT. IT WAS ALSO THE CASE OF THE ASSESSEE THAT REGULAR DEPRECIATION ON THE PLANT AND MACHINER Y WAS GRANTED, FOR WHICH THE ADDITIONAL DEPRECIATION WAS DENIED. THE ASSESSEE FURTHER SUBMITTED THAT AS PER SECTION 32(1)(IIA) OF THE ACT, ACTIVITY OF THE ASSESSEE FALLS WITHIN THE SUB-CLAUSE (IIA) OF S ECTION 32 AND THEREFORE THE ASSESSEE IS ENTITLED TO THE ADDITIONA L DEPRECIATION EQUAL TO 20% OF THE ACTUAL COST OF THE NEW PLANT AND MACH INERY. ITA.1978 & 2001/BANG/2017 PAGE - 7 08. ON THE OTHER HAND THE LD. DR VEHEMENTLY OPPOSED THE SUBMISSION OF THE ASSESSEE AS THE ASSESSEE HAS FILE D TO PROVE THE PURCHASE OF NEW PLANT AND MACHINERY DURING THE YEAR UNDER CONSIDERATION AND THEREFORE THE REQUIREMENT OF SECT ION 32(IIA) ARE NOT FULFILLED BY THE ASSESSE. EVEN ASSUMING THAT T HE ACTIVITY OF THE ASSESSEE FALLS WITHIN THE DEFINITION OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING U/S.32(IIA) OF THE ACT. 09. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BEFORE WE ADVERT TO THE FACTS AND DECIDE THE LEGAL ISSUE, FOR THE SAKE OF CLARITY AND REFERENCE, WE REPRODUCE HEREIN BELOW THE PROVISION AS PER SECTION 32(1)(IIA) AND DEFINITION OF MANUFACTUR E AS PROVIDED IN SECTION 2(29)(BA) OF THE ACT : 32(1)(IIA) IN THE CASE OF ANY NEW MACHINERY OR PLANT (OTHER THAN SHIPS AND AIRCRAFT), WHICH HAS BEEN ACQUIRED AND INSTALLED AFTER THE 31 ST DAY OF MARCH, 20015 BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING OR IN THE BUSINESS OF GENERATION, TRANSMISSION OR 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) ; ITA.1978 & 2001/BANG/2017 PAGE - 8 SECTION 2(29)(BA) OF THE ACT : (29BA) 'MANUFACTURE', WITH ITS GRAMMATICAL VARIATIONS, MEANS A CHANGE IN A NON-LIVING PHYSICAL OBJECT OR ARTICLE OR THING, (A) RESULTING IN TRANSFORMATION OF THE OBJECT OR ARTICLE OR THING INTO A NEW AND DISTINCT OBJECT OR ARTICLE OR THING HAVING A DIFFERENT NAME, CHARACTER AND USE; OR (B) BRINGING INTO EXISTENCE OF A NEW AND DISTINCT OBJECT OR ARTICLE OR THING WITH A DIFFERENT CHEMICAL COMPOSITION OR INTEGRAL STRUCTURE;] FROM THE CONJOINT READING OF THE ABOVE SAID PROVISI ONS IT IS CLEAR THAT FOR THE PURPOSES OF CLAIMING THE BENEFIT OF AD DITIONAL DEPRECIATION, IT IS ESSENTIAL THAT : (I) THE ASSESSEE HAS ACQUIRED AND INSTALLED NEW ASS ETS IN THE YEAR UNDER CONSIDERATION, FOR WHICH THE ADDITIONAL DEPRE CIATION IS CLAIMED; AND (II) THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MAN UFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. 10. WE WILL FIRST DEAL WITH THE CONTENTION WHETHER THE ACTIVITY OF THE ASSESSEE FALLS WITHIN THE FOUR CORNERS OF BUSIN ESS ACTIVITY OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. AS MENTIONED BY ITA.1978 & 2001/BANG/2017 PAGE - 9 THE AO IN THE ASSESSMENT ORDER AS WELL AS BY THE AS SESSEE IN THE WRITTEN SUBMISSION, THE ASSESSEE COMPANY HAS ENTERE D INTO CONTRACT WITH JSW STEEL LTD, FOR PROCESSING AND CONVERSION O F STEEL COILS AS PER PARA 4.3 OF AO, WHICH READS AS UNDER : 4.3 IN THE AGREEMENT WITH THE JSW WAS ALSO CALLED F OR AND THE SAME IS FURNISHED FROM WHICH IT IS SEEN THAT TH E SCOPE OF WORK IS THAT JSW STEEL SUPPLY CRCA AND DRPO STEEL C OILS AND THE COMPANY SHALL PROCESS AND CONVERT THE COIL INTO FINISHED STEEL ON JOB WORK BASIS BY PROVIDING THE FOLLOWING JOB WORK FACILITY : SLITTING CUTTING PACKING PACKING CUT TO LENGTH FOR WHICH THE SOIL OF CONVERSION IS SLITTING .. RS.650/- PER TON CUT TO LENGTH .. RS.650/- PER TON AND THE COMPANY SHALL TRANSFER SUCH SCRAP / WASTE G ENERATED TO JSW STEEL AND SUCH ITEMS SHALL BE IN JSW STEELS ACCOUNT AND THE PACKING JOB IN THE SCOPE OF JSW STEELS. 11. NOW THE ISSUE TO BE EXAMINED IS WHETHER THE CUT TING OF THE COIL TO THE REQUIRED SIZE AS PER THE SPECIFICATION OF THE CUSTOMER WOULD AMOUNT TO MANUFACTURING ACTIVITY OR NOT. IF WE LOOK INTO THE AGREEMENT PRODUCED BEFORE US IN THE PAPER BOOK, EFF ECTIVE FROM 20.12.2017, THE SCOPE OF WORK WAS MENTIONED AS CONV ERSION OF COIL INTO FINISHED STEEL COIL. IN PARA 1.3 IT IS MENTIO NED AS UNDER : 1.3 JSWSPCL SHALL PROVIDE THE FOLLOWING JOB WORK F ACILITIES: SLITTING CUT TO LENGTH PACKING SLIT PACKING CUT TO LENGTH ITA.1978 & 2001/BANG/2017 PAGE - 10 THE VERY NATURE OF THE ACTIVITY OF THE ASSESSEE AS PER THE AGREEMENT IS IN THE NATURE OF JOB WORK AND NOT A MANUFACTURIN G ACTIVITY. THERE IS NEITHER A VALUE ADDITION NOR THE USE OF SKILLS F OR THE PURPOSE OF CONVERTING THE STEEL COIL ROLLED INTO ANY OTHER FOR M. ON THE CONTRARY THERE IS ONLY REDUCTION IN LENGTH OF THE STEEL COIL FROM ITS ORIGINAL SIZE AS PER THE REQUIREMENT OF THE CUSTOMER. DEFIN ITION OF MANUFACTURE AS GIVEN IN SECTION 2(29)(BA) REQUIRES TRANSFORMATION OF THE OBJECT FROM ONE THING TO A DIFFERENT OBJECT. IN OUR VIEW, THERE IS NO TRANSFORMATION OF THE STEEL COIL FROM EITHER IN PHYSICAL FORM OR ITS APPEARANCE. ONLY THERE IS A REDUCTION IN SIZE AND LENGTH OF THE COIL. THEREFORE NEITHER NEW OR A DISTINCT OBJECT O R ARTICLE WITH DIFFERENT CHEMICAL COMPOSITION OR DESIGN CAME INTO EXISTENCE. THEREFORE IN OUR VIEW, THE ACTIVITY OF THE ASSESSEE DOES NOT FORM PART OF THE MANUFACTURING ACTIVITY, AS PER SECTION 2(29)(BA) OF THE ACT. FURTHER IT WAS THE CONTENTION OF THE ASSESSEE THAT THE ACTIVITY OF THE ASSESSEE, IF NOT FALLING WITHIN THE DEFINITION OF M ANUFACTURE, WOULD FALL WITHIN THE DEFINITION OF PRODUCTION. IN OUR CONSIDERED OPINION ACTIVITY OF THE ASSESSEE WILL NOT FALL WITHIN THE D EFINITION OF PRODUCTION AS USED IN SECTION 32(1)(IIA) OF THE ACT . CUTTING OF THE STEEL ROLL INTO DIFFERENT SIZE OR DIMENSION WILL NO T BE A PRODUCTION ACTIVITY AND AS MENTIONED IN THE PRODUCTION AGREEME NT IT IS ONLY A JOB WORK. FURTHER IF WE SEE THE PHOTOGRAPH OF THE INPUT AND FINISHED PRODUCT, AT PAGE 24 OF THE PAPER BOOK, WHICH IS REP RODUCED BELOW, WE FIND NO CHANGE IN THE PHYSICAL FORM EXCEPT IN TH E REDUCTION IN THE WIDTH OF THE COIL IN BOTH THE PHOTOGRAPHS : ITA.1978 & 2001/BANG/2017 PAGE - 11 FROM THE ABOVE, WE FIND THAT THOUGH ONLY WIDTH OF THE COIL IS REDUCED AND THE STEEL COIL (HR {GI}) HAS BEEN REFE RRED AS HR (GI) SLITTING AND THEREFORE THERE IS CHANGE IN THE CHARA CTERISTIC OF BOTH THE COIL AND IN COMMERCIAL WORLD IT IS KNOWN BY DIFFERE NT COMMODITY. ASSESSEE RELIED UPON INDIA CINE AGENCIES V. CIT [2009] 308 ITR 98/[2008] 175 TAXMAN 361 (SC) . IN SAID CASE THE ASSESSEE WAS INVOLVED IN THE ACTIVITY OF CONVERSION OF JUMBO ROL LS OF PHOTOGRAPHIC FILMS INTO SMALL FLATS AND ROLLS OF DI FFERENT SIZES, THE APEX COURT HELD THE ACTIVITY CARRIED OUT BY THE ASS ESSEE TO BE MANUFACTURING. SIMILARLY IN IN ITO V. ARIHANT TILES & MARBLES (P.) LTD. [2010] 320 ITR 79/186 TAXMAN 439 , AFTER TAKING INTO ACCOUNT ITS EARLIER DECISIONS RENDERED IN AMAN MARBLE INDUSTRIES (P.) LTD. V. CCE, [2005] 1 SCC 279; CIT V. SESA GOA LTD. [2004] 271 ITR 331/[2005] 142 TAXMAN 16 (SC) ; LUCKY MINMAT (P.) LTD. V. CIT [2001] 9 SCC 669; RAJASTHAN SEB V. ASSOCIATED STONE INDUSTRIES [2000] 6 SCC 141; AND CIT V. N.C. BUDHARAJA & CO. [1993] 204 ITA.1978 & 2001/BANG/2017 PAGE - 12 ITR 412/70 TAXMAN 312 (SC) HELD THAT IN A CASE WHERE THE ASSESSEE WAS INVOLVED IN THE BUSINESS OF CONVERTING BLOCKS O F MARBLE INTO POLISHED SLABS AND TILES, BY APPLYING THE PRINCIPLE THAT THE PRODUCT CAN NO LONGER BE REGARDED AS ORIGINAL COMMODITY, BU T RECOGNIZED IN TRADE AS A DISTINCT AND NEW COMMODITY, HE WAS ENTIT LED TO THE EXEMPTIONS UNDER THE PROVISIONS OF THE INCOME TAX A CT. IN OUR VIEW ACTIVITY OF ASSESSEE FALLS UNDER MANUFACTURING ACTIVITIES , SIMILAR VIEWS WERE EXPRESSED BY HONBLE HIGH COURT IN MS. MEGHA DADOO * 2015] 57 TAXMANN.COM 309 (HIMACHAL PRADESH) TO THE FOLLOWING EFFECT : 20. THESE FINDINGS OF FACT, AFTER HAVING PERUSED THE R ECORD AND HEARD LEARNED COUNSEL FOR THE PARTIES, WE FIND TO BE IN NO MANNER PERVERSE OR ERRONEOUS, WARRANTING INTERFEREN CE. IN FACT, WE ARE IN AGREEMENT WITH THE OPINION SO RENDE RED BY THE TRIBUNAL. 21. IN COLLECTOR OF CENTRAL EXCISE V. TECHNOWELD INDUS TRIES 2003 (155) ELT 209 (SC), THE COURT WAS DEALING WITH A CASE WHERE THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF D RAWING WIRES INTO THINNER GAUGE FROM WIRES OF THICKER GAUG E, BY COLD DRAWING PROCESS. THE OLD PRODUCT DID NOT LOSE ITS I DENTITY OR COULD BE PUT TO SIMILAR AND SAME USE. IN OUR CONSID ERED VIEW, NO RATIO OF LAW IS LAID DOWN BY THE APEX COURT IN T HE SAID DECISION, UNLIKE THE ONES WE HAVE NOTICED HEREINABO VE. IN THE INSTANT CASE, AS WE HAVE ALREADY OBSERVED, BY APPLY ING THE SETTLED PRINCIPLES, THE ACTIVITY CARRIED OUT BY THE ASSESSEE CAN ONLY BE SAID TO BE MANUFACTURING A NEW PRODUCT. 22. LEARNED COUNSEL FOR THE REVENUE ALSO SEEKS RELIANC E UPON THE DECISION RENDERED BY THE APEX COURT IN BHARAT F ORGE & PRESS INDUSTRIES (P.) LTD. V. COLLECTOR OF CENTRAL EXCISE [1990] 1 SCC 532. EVEN THE SAID DECISION, IN OUR CO NSIDERED VIEW, IS INAPPLICABLE IN THE GIVEN FACTS AND CIRCUM STANCES. THERE THE ASSESSEE WAS DEALING WITH THE PROCESS OF CUTTING PIPES AND TUBES IN SMALL SIZES AND SHAPES, WHICH WE RE THOUGH ITA.1978 & 2001/BANG/2017 PAGE - 13 PASSED THROUGH CHEMICAL PROCESS, BUT HOWEVER, THERE WAS NEITHER ANY CHANGE IN THEIR BASIC PHYSICAL PROPERTI ES NOR IN THEIR END USE. IT IS IN THIS BACKDROP THAT THE COUR T OBSERVED THAT SMALLER ARTICLES CAN ALSO BE DESCRIBED AND USE D AS PIPES AND TUBES. MOREOVER, THE COURT WAS DEALING WITH A T OTALLY DIFFERENT LEGISLATION. 23. LEARNED COUNSEL FOR REVENUE ALSO SEEKS RELIANCE UP ON THE DECISION RENDERED BY THE HON'BLE SUPREME COURT OF I NDIA IN UNION OF INDIA V. J.G. GLASS INDUSTRIES LTD. [1998] 96 TAXMAN 29 . IN OUR CONSIDERED VIEW, THE DECISION DOES NOT ADV ANCE THE CASE OF THE REVENUE IN ANY MANNER. THERE THE ASSESS EE WAS INVOLVED IN THE ACTIVITY OF PRINTING NAMES AND LOGO S ON THE BOTTLES, WHICH DID NOT CHANGE THE CHARACTER OR COND ITION OF THE ORIGINAL PRODUCT. 24. THUS, KEEPING IN MIND THE EXPOSITION IN THE AFORES AID DECISIONS, WE HAVE NO HESITATION IN HOLDING THAT TH E APPELLATE TRIBUNAL WAS JUSTIFIED IN CONCLUDING THAT THE PRODU CT (ROUTE MARKER) PRODUCED BY THE ASSESSEE WAS COMMERCIALLY D IFFERENT FROM ITS RAW MATERIAL AND FURTHER, IT IS COMMERCIAL LY KNOWN TO BE DIFFERENT IN THE MARKET. IN OTHER WORDS, THE ASS ESSEE WAS ENGAGED IN MANUFACTURING OF THE SAID PRODUCT. THERE FORE, THE ASSESSEE WAS ENTITLED TO DEDUCTION CLAIMED UNDER SE CTION 80IC OF THE INCOME TAX ACT. WE FIND NO REASON TO DISAGRE E WITH THE SAID OPINION OF THE TRIBUNAL. AS A RESULT, THE APPE AL IS DISMISSED. SUBSTANTIAL QUESTIONS OF LAW ARE ANSWERE D ACCORDINGLY. THEREFORE IN THE PRESENT CASE THE STRIPES HAS BEEN CHANGED / REDUCED./ SILTED/ WINDED IN DIFFERENT SIZE ETC , TH EREFORE THE ACTIVITY OF THE ASSESSEE WOULD FALL WITHIN THE DOMAIN OF MAN UFACTURE. 12. HOWEVER, AS NOTED IN PARA 4.4 OF THE ASST. ORDE R AND 8.3 OF THE CIT (A)S ORDER REPRODUCED HEREIN ABOVE, THE ASSESS EE HAS NOT PRODUCED THE RELEVANT BILLS PERTAINING TO PURCHASE OF NEW PLANT AND MACHINERY CLAIMED TO BE INSTALLED DURING THE YEAR U NDER CONSIDERATION. THEREFORE THE SECOND REQUIREMENT AS MENTIONED HEREIN ABOVE TO CLAIM THE BENEFIT OF ADDITIONAL DEP RECIATION ITA.1978 & 2001/BANG/2017 PAGE - 14 U/S.32(1)(IIA) HAD NOT BEEN FULFILLED WHICH REQUIR ES THE ASSESSEE TO PROVE THAT IT HAD ACQUIRED OF PLANT AND MACHINERY D URING THIS YEAR AND IT WAS USED FOR MANUFACTURING / PRODUCTION PURP OSES. 12.1 WE MAY FURTHER ADD THAT THE GROUND OF GRANT OF REGULAR DEPRECIATION ON THESE VERY MACHINES BY THE AO WAS NOT RAISED BEFORE THE CIT(A) IN THE GROUNDS OF APPEAL , THEREF ORE THIS CANNOT BE AGITATED BEFORE US WITHOUT RAISING A ADDITIONAL GRO UNDS IN ACCORDANCE WITH LAW . FURTHER, THOUGH THE ASSESSEE HAS ORALLY SUBMITTED BEFORE US, THAT THE AO HAS GRANTED THE RE GULAR DEPRECIATION ON THE PLANT AND MACHINERY, BUT NO EVI DENCE OR DOCUMENT OR ORDER HAS BEEN BROUGHT TO OUR NOTICE, F ROM THE RECORD BEFORE US, TO SHOW THAT THE ASSESSEE HAS BEEN GRANT ED REGULAR DEPRECIATION ON PLANT AND MACHINERY ON WHICH THE AD DITIONAL DEPRECIATION WAS CLAIMED BY THE ASSESSEE. , HENCE THE CONTENTION OF THE ASSESSEE THAT THE REGULAR DEPRECIATION WAS GRAN TED BY THE AO ON THESE PLANT AND MACHINERY WAS NOT BORNE OUT FROM TH E RECORD. ACCORDINGLY AS THE ASSESSEE HAS FAILED TO FULFIL TH E REQUISITE CONDITION AS MENTIONED IN SECTION 32(1)(IIA) OF THE ACT, THE ASSESSEE IS NOT ENTITLED TO ANY RELIEF. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN T HE APPEAL FILED BY THE ASSESSEE. ACCORDINGLY THE SAME IS DISMISSED. ITA.1978 & 2001/BANG/2017 PAGE - 15 12. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED WHILE THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH DAY OF MARCH, 2018. SD/- SD/- (INTURI RAMA RAO) ( LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 07 .03.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.