M/s. Shri Bharat Cement Pipe Co., Kolhapur V. DCIT, Cir.-2, Kolhapur

ITA 491/PUN/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 66834 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 06-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S P JOSHI
• Keywords: Depreciation; Maximum Marginal Rate; Additional depreciation; Question of law
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.491/PN/2010 ASSESSMENT YEAR : 2006 - 07 M/S. SHRI BHARAT CEMENT PIPE CO., D-2, MIDC, SHIROLI, KOLHAPUR VS. DCIT, CIRCLE-2, KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AAKFS4390K APPELLANT BY: SHRI S.P. JOSHI RESPONDENT BY: SMT. SHAILJA RAI ORDER PER R.S. PADVEKAR, JM:- THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING THE IMPUGN ED ORDER THE OF THE LD.CIT(A), KOLHAPUR DATED 07-12-2009 FOR THE A.Y. 2006- 07. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRM ING THE DISALLOWANCE OF ADDITIONAL DEPRECIATION ON MACHINERY US ED IN PRODUCTION BUSINESS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIA TE THAT THE APPELLANT WAS ENTITLED FOR ADDITIONAL DEPRECIATION ON P LANT AND MACHINERY WHICH WAS ENGAGED IN THE PRODUCTION BUSINES S. 2. THE ISSUE IS IN RESPECT OF ADDITIONAL DEPRECIATION U/S.32 (1)(IIA) OF THE INCOME-TAX ACT. THE FACTS REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE FIRM IS ENGAGING IN MANUFACTURING AND SELLING C EMENT PIPES. THE ASSESSEE IS ALSO ENGAGED IN THE ACTIVITIES RELAT ING TO IRON ORE PRODUCTION. THE NATIONAL MINERAL DEVELOPMENT CORPORATION L IMITED (IN SHORT NMDC) DISTRICT BELLARY INVITED TENDERS FROM THE CONT RACTORS FOR HIRING OF PLANT AND MINING MACHINERIES FOR WORKING IN KUMARSWA MY IRON ORE MINE (IN SHORT KOIM). THE SCOPE OF THE WORK WAS ANNUAL EXCAVATION OF 1.2 MILLION TONES (+/-20%) OF RUN OF MINES (ROM) A ND 0.8 MILLION TONES (+/-20%) OF WASTE/LOW GRADE IRON ORE BY ENGA GING MINING 2 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR EQUIPMENTS FOR DRILLING, EXCAVATION, WEIGHMENT, CRUSHING AND S CREENING, TRANSPORTATION AND STACKING AT DESIGNATED AREA. THE AS SESSEES TENDER WAS ACCEPTED BY THE NMDC AND WORK ORDER WAS GIVEN. F OR EXECUTION OF THE WORK ORDERS, THE ASSESSEE FIRM PURCHASED CRUSHING A ND SCREENING PLANT, ROCK BREAKER (RB), EXCAVATOR AND WEIGH BRIDGE. IT I S A CLAIM OF THE ASSESSEE THAT SINCE SAID MACHINERY WAS USED BY TH E ASSESSEE IN THE MANUFACTURE/PRODUCTION OF ARTICLE OR THING ON JOB WORK BA SIS, THE ASSESSEE WAS ENTITLED FOR ADDITIONAL DEPRECIATION IN RESPECT OF PLANT AND MACHINERY USED FOR PRODUCTION OF IRON ORE ON JOB WORKS BASIS. THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF CIT VS. SESA GOA LIMITED, 271 ITR 331 (SC). FOR T HE A.Y. 2006- 07 THE ASSESSEE CLAIMED ADDITIONAL DEPRECIATION OF RS.66,22,02 8/- ON MACHINERIES PURCHASED DURING THE YEAR U/S.32(1)(IIA) OF THE ACT. 2.1 THE ASSESSING OFFICER FRAMED THE FOLLOWING QUESTIONS IN RE SPECT OF CLAIM OF THE ASSESSEE U/S.32(1)(IIA) OF THE ACT (1) WHETHER THE ACTIVITY CARRIED OUT BY THE ASSESSEE AMOUNTS TO MANUFACTURE/PR ODUCTION? (2) AND WHETHER THE ASSESSEE DOING JOB WORK CAN BE TREAT ED AS THE ASSESSEE IS ENGAGED IN ACTIVITY OF MANUFACTURE/PRODUCTION? THE ASS ESSING OFFICER SOUGHT INFORMATION FROM M/S. NMDC LTD, DONIMALAI AND M/S. MU KUND LTD., GINIGERA, KOPPAL DIST., KARNATAKA AS THE ASSESSEE HAS CARRIED TO WORK FOR THE SAID COMPANY. THE NMDC SENT REPLY TO TH E ASSESSING OFFICER DATED 01-10-2010. ON THE BASIS OF REPLY RECEIVED FROM NMDC, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS BE EN ENGAGED BY THE SAID COMPANY FOR TRANSPORTATION OF IRON ORE FROM VALLE Y TO DUMPING PLOTS FOR LOADING INTO WAGONS AND FOR THE SAID WORK THE AS SESSEE HAS GIVEN ON HIRE MINING MACHINERY FOR KIOM SITE OF NMDC. THE ASSESSING OFFICER ALSO REFERRED TO THE WORK ORDER NO. 989 DATED 24- 12-2004 IN WHICH THE NATURE OF WORK SPECIFIED AS TRANSPORTATION OF ORE AND THE WORK ORDER NO. 311E-A:438:05-06 DATED 21-12-2005 IN WHIC H THE NATURE OF WORK IS SPECIFIED AS HIRING OF MINING MACHINERY FOR KIOM. THE ASSESSING OFFICER ALSO EXAMINED THE STATEMENT OF PAYMENT A ND HAS NOTED 3 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR THAT THE TYPE OF WORK MENTIONED IN THE STATEMENT IS AS TRANSPORTATION AND LOADING AND HIRING OF MACHINERY. THE ASSESSING OFFICER ALS O OBSERVED THAT IN THE WORK ORDER NO. 989 IT IS CLEARLY ME NTIONED THE WORK OF TRANSPORTATION OF 6.50 LAKH TONES (+/- 20%) OF FINE ORE FRO M VALLEY DUMP TO THE PLOTS AND LOADING INTO WAGONS AND LOADING OF 5 .00 LAKH (+/- 20%) LUMP/FINE ORE INTO TRUCKS FROM VARIOUS LOCATIONS. THE ASSESSING OFFICER REFERRED TO THE AGREEMENT BETWEEN THE ASSESSEE AND NMDC DATED 21-12-2005 IN WHICH THE ASSESSEE FIRM IS MENTIONED AS CON TRACTOR. THE ASSESSING OFFICER, THEREFORE, CAME TO THE CONCLUSION THAT TH E ASSESSEE FIRM IS NOT THE MANUFACTURER OR PRODUCER OF ANY ARTICLE OR THING, BUT, ONLY A CONTRACTOR AND IN ADDITION IT HAS BEEN RECEIVING H IRING CHARGES FOR EARTH MOVING/MINING MACHINERY, HENCE, NOT ELIGIBLE FOR ADDITION AL DEPRECIATION U/S. 32(1)(IIA) OF THE ACT. THE ASSESSING OFFICER A LSO REFERRED TO THE WORK ORDER OF M/S. MUKUND LIMITED DATED 24-05-20 05 IN WHICH IT IS SPECIFIED THAT THE WORK ON EXCAVATION OF RUN OF MINE, LOADING AND TRANSPORTATION OF SAME BY TRUCKS TO CRUSHER YARD OR S TOCK YARD, TRANSPORTATION OF WASTE TO WASTE DUMPS ETC. 2.2 THE ASSESSING OFFICER ALSO REFERRED TO THE TDS CERTIFICAT ES ISSUED BY THE SAID COMPANY IN WHICH REFERENCE TO SECTION 194C IS MADE AND IN THE OPINION OF THE ASSESSING OFFICER THE SAID CERTIFICATES SUG GEST THAT THE ASSESSEE IS A MERE CONTRACTOR AND NOT IN THE MANUFACT URING/PRODUCING OF ANY ARTICLE OR GOODS. THE ASSESSING OFFICER REPRODUCED THE TERMS AND CONDITIONS OF THE CONTRACT AS PER THE WORK ORDER NO. 98 9 DATED 24-12- 2004 ISSUED BY THE NMDC TO THE ASSESSEE WHICH ARE AS UNDER: 1. THE TRANSPORTATION OF FINE ORE FROM SCREENING PLANT VALLEY DUMP TO THE PLOTS BETWEEN ROAD NO. 3&4 TO BE COMMENCED I MMEDIATELY WITH IN 15 DAYS OF RECEIPT OF LOI AND TO BE COMPLET ED ON OR BEFORE 24.12.2005. 2. SECURITY DEPOSIT @ 10% WILL BE DEDUCTED FROM THE RU NNING BILLS AND WILL BE REFUNDED AFTER 30 DAYS FROM THE DATE OF FIN AL PAYMENT OF THE BILL(S). EMD DEPOSIT MAY BE ALSO BE ADJUSTED TOWARD S THE SD. HOWEVER, THIS WILL NOT YIELD ANY INTEREST. 3. TRANSPORTATION OF FINES FROM SCREENING PLANT VALLEY DUMP TO THE PLOTS BETWEEN ROAD NO. 3&4 IS TO BE DONE WITHOUT WE IGHMENT OF 4 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR EMPTY OR LOADED TRUCKS AND THE FINE ORE SHOULD BE LOADED INTO THE WAGONS WITH THE LOADING TIME PERMITTED BY THE RAILWAYS. AN Y SHORTAGE ARISING ON ACCOUNT OF LOADING OF THE WAGON S WILL BE ADJUSTED AGAINST YOUR BILL. YOU MUST THEREFORE EN SURE LOADING INTO WAGON TO ITS PERMISSIBLE CARRYING CAPACITY ONLY. REPEAT TO ITS PERMISSIBLE CARRYING CAPACITY ONLY. THE WEIGHT RECO RDED IN THE RR WILL BE FINAL. 4. LOADING OF LUMP ORE/FINE ORE IN TO TRUCKS FROM VARIOUS LOCATIONS IS TO CARRYING CAPACITY OF TRUCKS TO AVOID SPILLAGE EN- ROUTE. PAYMENT FOR THE TONNAGE LOADED IN TO THE TRU CKS WILL BE BASED ON WEIGHMENT RECORDED AT OUR ELECTRONIC TRUCK WEIGH BRIDGE. 5. THE TRANSPORTATION OF ORE SHOULD BE DONE ON ALL WORKING DAYS DURING 1 ST AND 2 ND SHIFTS I.E. FROM 6.00 A.M. TO 10.00 P.M. HOWEVER, PERMISSION TO TRANSPORT ON PAID HOLIDAYS AND SUNDAY AND IIIRD SHIFT WILL BE GIVEN AT THE DISCRETION OF CORPORATION. 6. YOU SHOULD TAKE CARE OF DUST SUPPRESSION BY SPRINKLI NG WATER WHEREVER NECESSARY ON THE HAULAGE ROAD, RAILWAY YAR DS AND OTHER AREA AS PER THE INSTRUCTION OF ENGINEER-IN-CH ARGE. 7. EVERY DAY, BEFORE COMMENCEMENT OF TRANSPORTATION FINES FROM VALLEY DUMP, YOU SHOULD SPRINKLE WATER ON ROAD LEADING TO RNJP WITHOUT FAIL. 8. AT ALL DOUR OPERATIONAL AREAS, YOU SHOULD TAKE CARE OF DUST SUPPRESSION BY SPRINKLING WATER WHEREVER NECESSARY O N THE HAULAGE ROADS/AREAS AS PER THE INSTRUCTION OF ENGINEER-IN-CHARGE. 9. YOU SHOULD EMPLOY SPOTTER(S) AT ROAD JUNCTION WHERE VER NECESSARY TO ENSURE SAFE OPERATION OF TIPPER/TRUCK DURING THE TRANSPORTATION WORKS. 10A. 100% PAYMENT IN THE FORM OF A CROSSED CHEQUE O N SBM/CANARA BANK, DONIMALAI TOWNSHIP BRANCH WILL BE MADE ON-EAC H RUNNING BILL ON THE BASIS OF RR WEIGHT ONLY. PAYMENT WILL BE DON E ONCE IN A FORTNIGHT ONLY. 10B. FOR ANY LEFTOVER QUANTITY IN PLOTS BETWEEN ROA D NO. 3&4 AFTER COMPLETION OF THE WORK, PAYMENT SHALL BE MADE FOR TRANSPORTATION ONLY, BASED ON I SURVEY REPORT BEFORE COMMENCEMENT OF THE WORK, RR WEIGHTS FOR WHICH PAYME NT WERE ALREADY MADE AND SURVEY REPORT AFTER COMPLETION OF THE WORK. 11. YOU SHOULD MAKE YOUR OWN ARRANGEMENT FOR DIESEL, PETROL AND LUBRICANTS FOR YOUR VEHICLES. 12. THE OVERTIME CHARGE IF ANY PAYABLE TO NMDC STAFF WHO ARE DETAILED FOR THE ABOVE WORK ON SUNDAY OR HOLIDAYS WILL B E RECOVERED FROM YOUR BILL(S) AT THE RATE APPLICABLE. 13. LEVELING AND STACKING AT PLOT BETWEEN RD 3&4 AS PER THE INSTRUCTION OF THE SITE-IN-CHARGE WOULD BE DONE SO AS TO MAKE SPACE FOR FURTHER DUMPING OF ORE. 14. YOU SHOULD TAKE ALL NECESSARY SAFETY PRECAUTIONARY ME ASURES FOR THE STAFF ENGAGED BY YOU DURING THE COURSE OF EXECU TING THE WORK AS WELL AS COMPLY WITH THE ALL SAFETY REGULATIONS. 5 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR 15. YOU SHOULD COMPLY WITH PROVISIONS OF THE CONTRACT L ABOUR(R&A) ACT, 1970, PAYMENT OF WAGES ACT AND RULES AND MAINTAIN ALL S TATUTORY RECORDS PROVIDED THEREIN. YOU SHOULD ALSO ENSURE THAT THE PAYMENT TO THE LABOURERS ENGAGED FOR THIS WORK SHOULD NOT BE LESS THAN THE RATE OF MINIMUM WAGES FIXED BY GOVERNMENT FROM TIME TO TIM E. 16. YOU SHOULD CLEAR THE SPILLAGE OF ORE ALONGSIDE THE ROADS WHILE TRANSPORTING THE FINE ORE A,S PER THE INSTRUCTIONS OF OFFICER-IN- CHARGE OF THE WORK. 17. YOU SHOULD NOT EMPLOY WOMEN AND ADOLESCENT BOYS FOR T HE SUBJECT WORK. NO CHILD LABOUR SHALL BE DEPLOYED. 18. YOU ARE REQUIRED TO FURNISH A LICENSE OBTAINED BY T HE CONTRACT RULES THERE UNDER, IF YOU ENGAGE MORE THAN 19 PERSONS IN TOTAL ON ANY DAY FOR THE WORK. 19. YOU SHOULD PROMPTLY REMIT THE PF RECOVERIES TO CON CERNED RPFC, HUBLI AND MAINTAIN NECESSARY RECORDS AS REQUIRED UN DER PF REGULATION. 20. RDS ON ACCOUNT OF INCOME TAX WILL BE DEDUCTED AS A PPLICABLE FROM RA BILLS. 21. YOU SHOULD CARRY OUT THE WORK STRICTLY IN ACCORDANC E WITH PROVISIONS I OF MINES ACT, 1952, MMR, 1 961, MINE RULES 1955 AND DGMS'S CIRCULAR ISSUED FROM TIME TO TIME AS APPLICABLE TO THIS WORK. 22. LOADING OF ORE INTO THE WAGON UP TO THE LOAD MARK GIVEN BY NMDC/RNJP STAFF SHOULD BE CARRIED OUT BY USING FRON T-END LOADER AS AND WHEN RAKES ARE PLACED AT RANJITPURA SIDING A ND ON RECEIPT OF INFORMATION/ INSTRUCTION FROM TIME TO TIME. 23. AFTER LOADING ORE IN TO WAGONS, YOU SHOULD ARRANGE FOR PROPER LEVELING OF THE SAME TO THE SATISFACTION OF RNJP RA ILWAY STAFF. 24. THE ENTIRE LOADING WORK HAS TO BE CARRIED OUT WELL WITHIN FREE TIME ALLOWED BY THE RAILWAY AUTHORITIES FROM TIME T O TIME PLACEMENT OF RAKES AT RANJITPURA SIDING. WAGON LOAD ING HAS TO BE CARRIED OUT 24 HOURS IN A DAY IF RAKES ARE PLACED B Y 'THE RAILWAYS. 25. THE DEMURRAGE OF PUNITIVE CHARGES IF ANY ON THE RAK ES WILL BE TO YOUR ACCOUNT. 26. YOU WILL BE WHOLLY RESPONSIBLE , IN CASE, YOU ARE N OT COMPLYING WITH ALL STATUTORY RULES AND REGULATIONS CONNECTED WITH THIS WORK VIZ. MINIMUM WAGES ACT, WORKMEN COMPENSATION ACT, CPF AC T AND RULES, MINES ACT, 1952 AND MMR 1961, MINES RULES 19 55 AND DGMS CIRCULAR ISSUED FROM TIME TO TIME ETC. AS MAY BE IN VOGUE. 27. THE ENTIRE WORK SHOULD BE CARRIED OUT IN ACCORDANCE WITH INSTRUCTIONS ISSUED FROM TIME TO TIME BY SR. MANAGE R (G&QC) OFFICER-IN-CHARGE OR HIS REPRESENTATIVE FOR THE SAI D JOB. 28. NMDC LTD. WILL NOT BE LIABLE FOR ANY COMPENSATION P AYABLE UNDER WORKMEN COMPENSATION ACT IN CASE OF EVENT LIKE INJU RY, DEATH ETC. DUE TO ACCIDENT. 29. IN CASE OF POOR DISPATCHES, STACKING OF MATERIAL IN ROAD NO. 3&$ WILL BE THE RESPONSIBILITY OF THE PARTY AND PAYMENT WILL BE MADE ON TRANSPORTED QUANTITY BASED UPON CERTIFICATE GIVEN B Y THE ENGINEER-IN- CHARGE. 6 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR 30. THE E$AD OF RS. 2.12. LAKHS WILL BE CONVERTED AS SE CURITY DEPOSIT. SECURITY DEPOSIT @ 1 0% WILL BE RECOVERED FROM EACH RA BILL SUBJECT TO MAXIMUM OF RS. 100 LAKHS (INCLUDING THE EMD AMOU NT), AFTER WHICH NO SD WILL BE RECOVERED. THE SD WILL BE REFUN DED AFTER ONE MONTH FROM THE DATE OF COMPLETION OF THE WORK. THE SD WILL NOT CARRY ANY INTEREST. 31. ALL THE TIPPERS/LOADERS ENGAGED BY YOU FOR TRANSPORTATION OF FINE MUST ENTER, EXIT THROUGH MAIN CHECK POST ONLY. 32. ALL TIPPERS/LOADERS ENGAGED BY YOU SHALL BE SENT TO OUR AUTO GARAGE ATLEAST ONCE IN A FORT NIGHT FOR INSPECTION BY OUR MECHANICAL ENGINEER FOR CERTIFYING ITS ROAD WORTHINESS OF THE VEHICLE. 33. YOU SHOULD DEPUTE YOUR STAFF ENGAGED FOR THE ABOVE WORK, FOR BASIC VOCATIONAL TRAINING AT OUR TRAINING AND SAFETY DEPA RTMENT. NO PERSONS SHALL BE ENGAGED WITHOUT VALID VT CERTIFICA TE. 34. IF THE WORK IS NOT COMPLETED WITHIN THE SCHEDULED C OMPLETION TIME AND THE DELAY IF ATTRIBUTABLE I TO YOU, A PENALTY A T 1% OF THE W,O, PER WEEK OF DELAY SUBJECT TO MAXIMUM OF 5% OF THE W .O. VALUE WILL BE LEVIED ON YOU. 35. YOU HAVE TO EXECUTE AN AGREEMENT IMMEDIATELY ON REC EIPT OF THIS WORK ORDER IN STAMP PAPER WORTH RS. 100. THE FORMAT OF WHICH CAN BE HAD FROM US. 36. ACCOMMODATION AS REQUESTED BY YOU WILL BE PROVIDED IF AVAILABLE ON CHARGEABLE BASIS. 3. THE ASSESSING OFFICER RELIED ON THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF CIT VS. GUPTA GLOBAL EXIM P . LTD., 305 ITR 132. THE ASSESSING OFFICER FINALLY REJECTED THE CLAIM OF THE ADDITIONA L DEPRECIATION TO THE ASSESSEE WHICH WAS MADE U/S.32(1)(IIA) OF THE ACT. THE ASSESSEE CARRIED THE ISSUE BEFORE THE LD.CIT(A). THE LD.CIT(A) CALLED FOR REPORT FROM THE ASSESSING OFFICER AS IN THE SUBMISSION IT WAS CLAIMED BY THE ASSESSEE THAT ACTIVITIES CARRIED BY THE ASSESSEE AT IRON ORE MINE SITE ARE LIKE DRILLING, BLASTING, EXCAVATION AND LOADING, TRANSPOR TATION AND UNLOADING, WEIGHMENT, CRUSHING, SCREENING PLANT, PROCESSING OF RUN OF MINES (ROM). 3.1 THE ASSESSING OFFICER AGAIN REFERRED TO THE WORK ORDER BY THE NMDC AND WAS OF THE FIRM VIEW THAT EVEN THOUGH THE WORK ORDER WAS AMENDED SUBSEQUENTLY ON 25-02-2005 AND FOR THE FIRST T IME FILED BEFORE THE LD.CIT(A), THE SAID WORK ORDER DOES NOT SPEAK ABOUT THE EXCAVATION ACTIVITIES. MOREOVER, THE AGREEMENT DATED 21-12-2005 ON LY SPEAKS ABOUT 7 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR THE SUPPLY OF MACHINERY FOR MINING OPERATION AND MAINTENAN CE AND NOWHERE IT IS STATED IN THE AGREEMENT ABOUT THE ACTUA L EXCAVATION WORK. THE ASSESSING OFFICER ALSO STATED THAT THERE WAS NOTHING TO SUGGEST THAT THE ASSESSEE WAS ENGAGED IN MANUFACTURING OR PRODUCTION ACTIVITIES. MOREOVER, IN VIEW OF THE ASSESSING OFFICER, THE BILLS SHOW THAT THE CONTRACT OF ASSESSEE WAS ONLY FOR HIRING OF MACHINERY OR EQUIPMENTS. THE LD.CIT(A) WAS CONVINCED WITH THE STAND OF THE ASSESSI NG OFFICER AND HE CONFIRMED THE ACTION OF THE ASSESSING OFFICER REJECTING T HE CLAIM OF THE ASSESSEE. THE OPERATIVE PART OF THE REASONS AND FINDINGS OF THE LD.CIT(A) ARE AS UNDER: 8. THE SUBMISSIONS OF THE APPELLANT AND A.O. HAVE BEEN CONSIDERED. AS PER THE INVOICES PRODUCED, THE MACH INERY WAS PURCHASED ON 10.06.2005 (HYDRAULIC EXCAVATION), 20. 10.2005 (WEIGHING BRIDGE) & 21.10.2005 (CRUSHING & SCREENING PLANT). I T IS NOT DISPUTED THAT AS PER THE TENDER NOTICE DATED 20.01.2005, THE SC OPE OF WORK WAS HIRING OF PLANT AND MINING MACHINERY FOR ANNUAL EXCAVATION OF 1.2 MILLION TONES OF ROM AND .8 MILLION TONES OF LO W GRADE IRON ORE FOR DRILLING, EXCAVATION, TRANSPORTATION, WEIGHMENT, CRU SHING & SCREENING AND STACKING. VIDE AMENDMENT TO THE WORK ORDER DATED 24.12.2004, WORK ORDER DATED 24.12.2004 WAS AMENDED TO INCLUDE LO ADING OF DUMP ORE FINE INTO TRUCKS FROM VARIOUS LOCATIONS. EX CEPT THIS CHANGE, THERE WAS NO OTHER AMENDMENT MADE TO THE WORK ORDER AS PER THE CONTRACT AGREEMENT DATED 21.12.2005 WHICH WAS NOT CONS IDERED BY THE ASSESSING OFFICER. IT WAS MENTIONED THEREIN THA T THE WORK OF SUPPLY OF MINING MACHINERY, OPERATION AND MAINTENANCE OF SUCH MACHINERY, SUPPLY AND OPERATION OF ORE TREATMENT PLA NT INCLUDING MAINTENANCE OF THE SAME AND TRANSPORTATION OF ORE WIT HIN THE MINES INCLUDING MAINTENANCE OF ROADS WITHIN THE MINKS INCLUD ING LOADING AND UNLOADING OF ROM OR FINISHED PRODUCT TO THE CUST OMERS AS DECIDED BY THE CORPORATION FROM TIME TO TIME AND SUPP LY AND OPERATION OF WEIGH BRIDGE INCLUDING STACKING OF WAST E AND SUPPLY OF GRADE MATERIAL SEPARATELY AT THE MINE SITE. THE PERIOD OF OPERATION OF THIS SUPPLY OF MACHINERY WAS INITIALLY FOR 2 YEARS E XTENDABLE UPTO ANOTHER 1 YEAR. IT IS VERY CLEAR FROM THIS AGREEMENT THAT THE JOBS TO BE PERFORMED BY THE APPELLANT ARE IN THE NATURE OF W ORK WHICH DO NOT AMOUNT TO ANY PRODUCTION OR PROCESSING OF ARTIC LES OR THINGS. THE PROVISIONS OF SECTION 32(1)(IIA) WERE INTRODUCED W.E .F. 01.04.2006 BY THE FINANCE ACT, 2005 WHEREIN IT IS CLEARLY MENTION ED THAT THE ASSESSEE SHOULD BE ENGAGED IN THE BUSINESS OF MANUFA CTURING OR PRODUCTION OF ANY ARTICLE OR THING. IN THIS CASE, THE APPELLANT IS ONLY IN THE BUSINESS OF HIRING OF EQUIPMENTS AND ACTUALLY KIOM IS IN THE BUSINESS OF PRODUCTION OF IRON ORE AND NOT THE APPELLANT ITSELF. 8.1. THE APPELLANT PLACED HEAVY RELIANCE ON THIS LE TTER DATED 16.09.2008. THIS LETTER WAS ISSUED BY D.G.M. (MINING/K.I.O .M) WHEREIN IT WAS MENTIONED THAT THE APPELLANT WAS CARR YING ON THE WORK OF DEVELOPING THE MINE,, EXCAVATION OF R.O.M., PROCEE DING OF R.O.M. BY CRUSHING AND SCREENING TO GET CALIBRATED LUM P ORE AND FINE OF THE REQUIRED QUALITY AND SIZE BY USING PROPER EQ UIPMENT AND MACHINERY. THIS WORK OF THE APPELLANT WAS IN THE NATUR E OF VALUE ADDITION TO R.O.M. HE ALSO MENTIONED THAT SALABLE R ATE OF R.O.M. WAS 8 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR RS.L,780/- PER TON ON AN AVERAGE AS AGAINST SALABLE C.L.O. AND FINES ARE RS.2, 364/- & R'S.L,800.94/- PER TON, RESPECTIVELY. THIS LETTER WAS ISSUED AT THE SPECIFIC REQUEST OF THE GENERAL MA NAGER OF THE APPELLANT. THE ASSESSING OFFICER ON THE OTHER HAND PL ACED RELIANCE ON LETTER DATED 01.10.2008 ISSUED BY ASSTT. MANAGER (FIN ANCE) WHEREIN IT WAS MENTIONED THAT-THE NATURE OF WORK WAS TRANSPORTATION OF ORE, HIRING OF MINING 1 MAC HINERY FOR K.I.O.M. WHEREIN RATES PER HOUR FOR VARIOUS EQUIPMENTS. IT WAS MENTIONED IN THIS LETTER THAT THE AMOUNT PAID WAS AS PER WORK ORD ER DATED 24.12.2004 AND 21.12.2005. THIS LETTER WAS ISSUED IN RE SPONSE TO THE ENQUIRY MADE THE ASSESSING OFFICER VIDE LETTER D ATED 25.08.2008 AND CARRIES MORE WEIGHT. 8.2. THE CASE LAWS RELIED ON BY THE APPELLANT WERE AN ALYSED IN THE ASSESSMENT ORDER AS UNDER: [1] 305 ITR 132 - CIT V/S SESA GOA ITD.:- IN THIS CASE, THE ASSESSEE ITSELF WAS THE USER OF MA CHINERY IN ITS OWN MINES AND PRODUCTION WAS SOLD BY IT. IN THE PRE SENT CASE, THE APPELLANT IS ONLY A .CONTRACTOR ENGAGED IN TH E HIRING OF MACHINERY IN THE CASE OF CIT V/S RANE/(MADRAS) LT D. ALSO THEISSUE WAS REGARDING INCOME DERIVED FROM BUSINESS ACTIVITY.: [2] CIT V/S NORTHERN AROMATI CS LTD.(DELHI) :- 196, CTR 479 IS RELATING TO JOB WORK CHARGES AND THE ISSUE WAS WHETHER DEDUCTION U/S 80-IA WAS TO BE ALLOWED TO THE ASSESSEE DOING JOB WORK FOR OTHERS AND HON'BLE HIGH COURT OF DELHI HELD THAT THERE WAS NO SUBSTANTIAL QUESTION OF LAW AS THE ISSUE WAS ONE OF FINDING OF FACT. [3] CIT 1 V/S TAI FIRE WORKS (MADRAS) :- IN THAT CASE, THE ASSESSEE WAS PRODUCING CRACKERS FR OM RAW MATERIAL SUPPLIED -BY ANOTHER CONCERN ON JOB WORK BASI S. HON'BLE HIGH COURT HELD THAT THE ASSESSEE WAS ELIGIB LE FOR DEDUCTION U/S 80-HH AND 80-1 AS IT WAS AN INDUSTRIA L UNDERTAKING AND ALSO WAS A MANUFACTURER. THE FACTS OF THIS CASE ARE ENTIRELY DIFFERENT. . 8.3 THE DECISION IN THE CASE OF RAMCHANDRA ENTERPRIS ES RELIED ON BY THE APPELLANT IS| IN THE CONTEXT OF DEDUCTION U/S 80I B AND ALLOWABILITY OF PARTIAL DEPRECIATION ON MACHINERY LYING WITH VENDORS AND, THEREFORE, HAS NO APPLICATION TO THE FACTS OF TH IS CASE OR THE ISSUE ON HAND. 9. IN VIEW OF THE FOREGOING DISCUSSION, IT IS CLEAR THAT THE APPELLANT IS NOT ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODU CTION OF ANY ARTICLE OR THING. THEREFORE, THE APPELLANT IS NOT ELIGIBLE F OR ADDITIONAL DEPRECIATION OF 25% ON PLANT & MACHINERY ACQUIRED A ND INSTALLED AFTER 31.03.2005. THEREFORE, ALL THE GROUNDS OF APPEAL RA ISED BY THE APPELLANT ARE DISMISSED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. WE HAVE HEA RD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LEARNED COUNSEL 9 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR REITERATED THE SUBMISSIONS MADE BEFORE THE LD.CIT(A). THE ASSESSEE HAS ALSO FILED THE PAPER BOOK WHICH IS ALSO CONSIDERED BY US. T HE ASSESSEE HAS FILED COPY OF THE LETTER ISSUED BY NMDC DATED 16-09- 2008 (PAGE NO. 91) OF THE PAPER BOOK. AS THE SAID LETTER IS IMPORTANT WE REPRODUCE HERE THE CONTENTS OF THE SAID LETTER WHICH READS AS UNDER: SHRI BHARAT CEMENT PIPE CO. IS CARRYING OUT CONTRAC TUAL WORK AWARDED TO THEM AT OUR KUMARASWAMY IRON ORE MINES, NE AR DEOGIRI VILLAGE IN BELLARY DIST. (KARNATAKA). THEY ARE DOING THE WORK OF DEVELOPING THE MINE, EXCAVATION OF THE ROM (RUN OF MINE) FR OM MINE, PROCESSING THE ROM BY CRUSHING & SCREENING IN ORDER TO GET CLO (CALIBRATED LUMP ORE) AND FINES OF THE SPECIFIED QUA LITY AND SIZE. THUS SHRI BHARAT CEMENT PIPE CO. IS RESPONSIBLE FOR E XCAVATION OF ROM FROM THE MINES AND CONVERTING THE SAME INTO THE DESIRED FINAL PRODUCTS VIZ CLO AND FINES OF THE SPECIFIED SIZE AN D QUALITY BY USING PROPER EQUIPMENT AND MACHINERY. FURTHER THE WORK CARRIED OUT BY SHRI BHARAT CEMENT PIPE CO. OF EXCAVATING/CRUSHING/SCREENING/PROCESSING THE ROM TO PRODUCE CLO AND FINES OF DESIRED SPECIFICATION IS IN THE NA TURE OF VALUE ADDITION TO ROM AS ROM BY ITSELF HAS NO INDUSTRIAL APPL ICATION, WHILE THE FINE PRODUCTS (VIZ CLO & FINES) PRODUCED F ROM ROM ARE USED AS RAW MATERIAL FOR MANUFACTURING OF IRON & STEE L. THEREFORE, THE SALEABLE RATE OF ROM IS ONLY RS.1780.00 PER TON ON AVERAGE AS AGAINST THE SALEABLE RATE OF CLO & FINES ARE RS.2364.00 PER TON & RS.1800.94 PER TON RESPECTIVELY. 5. NMDC IS THE GOVERNMENT OF INDIA ENTERPRISES. FROM TH E VERY BEGINNING THE STAND OF THE ASSESSEE IS THAT THE ASSESSEE IS ENGAG ED IN THE EXCAVATION ACTIVITY AND IT IS NOT MERELY TRANSPORTATION O R DUMPING OF THE ORE. THERE IS A CHAIN OF ACTIVITIES WHICH ARE CARRYING OUT BY THE ASSESSEE AT MINE SITE. IN OUR OPINION BOTH THE AUTHORITIES BELOW H AVE NOT UNDERSTOOD THE CONTRACT BETWEEN THE ASSESSEE AND TH E NMDC IN PROPER PERSPECTIVE. NOWHERE IT IS DISPUTED THAT THE SITE AT WHIC H THE ASSESSEE HAS EXECUTED HIS CONTRACT HAVING NO TITLE OR INTEREST O F THE ASSESSEE NOR THE ASSESSEE IS IN THE BUSINESS OF EXCAVATION OF IRON OR E. THE CLAIM OF THE ASSESSEE IS THAT AS PER TERMS OF CONTRACT BETWEEN HIM AND NMDC, HE IS ENGAGED IN THE PRODUCTION OF IRON ORE BY CARRYING OUT ACTIVITIES LIKE EXCAVATION, CRUSHING OF THE BOLDERS, WASHING THE IRON ORE, SCREENING THE SAME, SORTING OF FINE ORE AND DUMPING THE WASTE INTO DUMPI NG GROUNDS OR PLOTS. WE FIND THAT EVEN AS PER THE WORK ORDER DATE D 21-12-2005 WHICH IS PLACED AT PAGE NO. 97 OF THE PAPER BOOK THOUGH APPARENTLY IF APPARENTLY EVENTS IMPRESSION THAT IT IS A WORK ORDER FO R HIRING OF THE 10 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR PLANT AND MINING MACHINERIES FOR WORKING IN KUMARASWAMY IRO N ORE MINING SITE. BUT AFTER EXAMINING THE TERMS OF THE AGREEMEN T/CONTRACT (PAGE NOS. 99 TO 117) WE ARE OF THE OPINION THAT THERE IS A TRUTH IN THE CLAIM OF THE ASSESSEE. THE CONTRACT DOES NOT SUGGEST T HAT THE ASSESSEE HAS MERELY HIRED THE MACHINERIES TO THE NMDC. AS THE I RON ORE IS TO BE EXCAVATED FROM THE EARTH, THERE IS A CHAIN OF PROCESS FO R MAKING THE FINE IRON ORE. 6. THE LD.DR PLACED HIS EMPHASIZE IN CLAUSE NO. 408 WHICH IS A PART TO AGREEMENT WHICH IS IN THE FORM OF INSTRUCTIONS WHEREIN IT IS MENTIONED THAT NMDC WILL APPOINT THE STAFF AS REQUIRED STATUTORILY FO R THE PURPOSE OF PROPER CONTROL, DIRECTION AND SUPERVISION OF THE WORKS. BUT BELOW IT IS MENTIONED THAT THE ASSESSEE SHOULD APPOINT SUFFICIENT NUMB ER OF SKILLED PERSONS LIKE MECHANICS, ELECTRICIANS, FITTERS, OPERATORS ETC. TO CARRY OUT THE WORK OF MINING ITSELF. AS IRON ORE IS COMPLEX FIELD OF ACTIVITY, HENCE, AS PER THE POLICY OF THE NMDC THEY HAVE TO KEEP THEIR S TAFF FOR CONTROLLING THE QUALITY AND TO GET THE MAXIMUM BEST YIELD. WE FIND THA T CRUSHING IS THE PART OF THE CONTACT OF THE ASSESSEE AND THE ASSES SEE IS ENGAGED INTO CARRYING OUT THE ENTIRE CHANGE OF PROCESS I.E. FROM THE EX CAVATION OF THE EARTH, CRUSHING OF THE BOLDERS, WASHING THE IRON ORE ETC. IN FACT, THE PRODUCTION TARGET IS GIVEN TO THE ASSESSEE AND PAYMENT TERMS ARE BASED ON PRODUCTION IN TONES. IT IS NECESSARY TO PRODUCE SOM E OF THE IMPORTANT TERMS OF THE CONTRACT WHICH ARE SELF EXPLANATORY TO SHO W THAT THE ASSESSEE IS NOT MERELY SUPPLYING THE MACHINERIES ON HIRE BUT ENGAGED IN THE FULFILLED PRODUCTION OF THE IRON ORE ON CONTRACT BASIS (PAGE NO. 110 OF THE PAPER BOOK). 1. DEVELOPMENT OF BENCHES, LAYING OF HAUL ROADS AND ERECT ION OF OTHER FACILITIES IN CRUSHING AND SCREENING AND WEIGH MENT IN ALL RESPECTS SHOULD BE COMPLETED WITHIN TWO MONTHS FROM TH E DATE OF ISSUE OF LOI AND PRODUCTION SHOULD COMMENCE TO MEET THE AGREED SCHEDULE OF SUPPLIES. THE PERIOD OF ONE YEAR SHALL BE RECKONED FROM THE DATE OF COMPLETION OF TWO MONTHS FROM THE DATE OF I SSUE OF LOI I.E. FROM - 01-11-05. 2. (I) PRODUCTION SCHEDULE DURING EACH OF FIRST YEAR A ND SECOND YEAR ARE: (A). ROM FED TO PLANT 12 LT HOWEVER, CORPORATION RES ERVES RIGHT TO ENHANCE THIS QUANTITY TO 14.4 LT. 11 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR (B). WASTE MINING 4.5 LT (C). SUB GRADE 3.5 LT (D). TOTAL EXCAVATION 20 LT QUANTITIES AT (B), (C), & (D) WILL CHANGE IN CASE ROM QUANT ITY IS ENHANCED. MONTHLY SUPPLY SCHEDULE BASED ON ABOVE QUANTITIES W ILL BE DRAWN MUTUALLY. (II) THE SUB GRADE ROM WHENEVER MINED AND STACKED FO R FUTURE USE AS PER THE INSTRUCTIONS OF MINE/MANAGER WILL BE TREATED AS WASTE FOR THE PURPOSE OF COMPUTATION OF CHARGES PAYABLE AND W ILL INVITE SAME PAYMENTS AS WASTE EXCAVATION. IN CASE/THE SUB-GRADE O RE REQUIRES FURTHER PROCESSING, THE COST OF PROCESSING (I.E CRUSHING AND SCREENING) INCLUDING THE TRANSPORTATION AND WEIGHMENT CHARGES WILL BE PAID EXTRA AS GIVEN AT ANNEXURE II OF PART III. THE QUANTITI ES OF WASTE AND SUB GRADE INDICATED ARE INCIDENTAL DEDUCED FROM THE AVAILABLE TECHNICAL DATA AND NEED NOT ESSENTIALLY OCCUR IN THE GIVEN PROPORTION/WHILE MINING. FOR THE PURPOSE OF EXCAVATION PLAN, THE OFFICER INCHARGE/OF CORPORATION SHALL GUIDE THE CONTR ACTOR AND GIVE HIM THE EXCAVATION SCHEDULE FORTNIGHTLY IN WRITING. EVE N AFTER GIVING THE SCHEDULE, AND ADHERING TO THE SAME, NON FULFILLMENT OF THE QUANTITIES OF WASTE AND SUB GRADE MATERIAL DUE TO TH EIR INCIDENCE PROBLEM IN THE ORE BODY SHALL NOT MAKE/THE CONTRACTO R LIABLE FOR PENALTIES. NOT FULFILLING OF THE ABOVE QUANTITIES MENT IONED AS REGARD TO WASTE MINING AND SUB GRADE ORE PROPORTIONATELY SH ALL NOT BECOME PRECEDENCE FOR ANY CLAIM FROM THE PART OF CONTRACTOR SINCE THE MATERIAL OF WASTE AND SUB GRADE ARE INCIDENTAL AN UNIQU E TO THE GEOLOGICAL CONDITIONS. FOR THE PURPOSES OF BILLING, THE QUANTITY OF ROM FED TO PLANT AND WASTE / SUB GRADE ORE MINED WILL BE TREATED THE QUANTITY. THIS CONTRACT MAY HOWEVER BE EXTENDED FOR ONE MORE YEAR/ON REVIEW OF PERFORMANCE AND THE PRODUCTION TA RGETS FOR THE EXTENDED PERIOD WILL BE\ SPECIFIED BY THE CORPORATIO N NOT EXCEEDING THE ABOVE./YEARLY QUANTITIES OR ON A FEASIBLE LEVEL. NO SEPARATE CONSENT SHALL BE RETIRED AS THE PRESUMPTION IS THAT TH E CONTRACTOR SHALL ABIDE BY THE DECISION OF CORPORATION, AND THE TE NDERING AMOUNTS TO ACCEPTANCE TO CARRY OUT FOR THE EXTENDED PE RIOD 3. DEPENDING UPON THE INCREASE IN DEMAND OF IRON OR E IN FUTURE YEARS, THE CONTRACTOR MAY BE REQUIRED TO PRODUCE HIG HER QUANTITY OF ROM, SUB-GRADE AND WASTE PER ANNUM. FOR THIS PURPOSE, NMDC SHALL GIVE SUFFICIENT ADVANCE NOTICE AND A PERIOD OF THREE MONTHS SHALL BE ALLOWED THEREAFTER TO DEPLOY PLANT AND MACHINERY TO ACHIEVE THE INCREASED LEVEL OF PRODUCTION. 4. HOWEVER, THE DETAILED FORTNIGHTLY SCHEDULE OF EXC AVATION AND PRODUCTION OF ORE WILL BE FINALIZED AFTER MUTUAL CONS ULTATION BETWEEN CORPORATION AND THE CONTRACTOR AT THE BEGINNING OF EVERY FORTNIGHT WITH ABOVE GIVEN YEARLY QUANTITIES. THE QUANTITIES AGREED TO MUTUALLY WILL FORM THE BASIS FOR CALCULATIONS OF PENALT Y FOR SHORT SUPPLY OF THE YEAR. 5. FINE ORE OF VARIOUS GRADES AND ALSO LOW GRADE LU MP ORE PRODUCED DURING THE SAID MINING OPERATIONS SHALL BE SEPARATELY STACKED AT THE SPECIFIED LOCATIONS NEAR THE PLANT S ITE WITHIN A DISTANCE OF 1.0 KM FOR FUTURE USE OF NMDC. THE ORE TYPES, WHICH MAY NEED SEPARATE STACKING, WILL BE INFORMED FROM T IME TO TIME BY THE ENGINEER INCHARGE DESIGNATED BY NMDC FOR THE PU RPOSE. NECESSARY GUIDANCE / DIRECTIONS M THIS REGARD WILL BE PROVIDED BY THE CORPORATIONS STAFF AT THE MINE UNDER THE OVERA LL CONTROL OF THE MINE MANAGER. 12 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR 6. THE OWNERSHIP OF ALL QUANTITIES OF MATERIALS EXCAVATED BY THE HIRED EQUIPMENTS DURING THE MINING OPERATIONS, WHETHER ORE OR WASTE, DUMPED IN THE MINE SHALL VEST WITH THE CORPOR ATION AND THE CONTRACTOR SHALL HAVE NO RIGHTS ON THE ABOVE DURING OR AFTER EXECUTION OF THE CONTRACT. 7. MOREOVER, AS PER THE TERMS OF THE CONTACT, PENALTY IS PROVIDED TO MEET THE MONTHLY TARGET IF THE ASSESSEE FAILS TO GIVE THE QUANTITY OF THE ROM I.E. PENALTY OF RS. 5 PER TON IS TO BE LEVIED. AFTER CONS IDERING THE ENTIRETY OF THE MATERIAL PLACED BEFORE US, WE ARE OF THE OP INION THAT THE ASSESSEE IS ENGAGED INTO THE PRODUCTION OF IRON ORE AND HE IS NOT MERELY SUPPLYING MINING MACHINERIES. WE ACCORDINGLY ANSWER FIRST Q UESTION IN FAVOUR OF THE ASSESSEE. 8. THE NEXT QUESTION IS IF THE ASSESSEE IS CARRYING OUT PRODUCTION AS A CONTRACTOR THEN WHETHER HE IS ENTITLED FOR ADDITIONAL DEPR ECIATION U/S. 32(1)(IIA) OF THE ACT? ON EXAMINATION OF THE PROVISIONS OF SECT ION 32(1)(IIA), NO WHERE IT IS SPECIFIED THAT THE PRODUCTION OF ANY ARTICLE OR GOODS SHOULD BE THE ASSESSEES OWN BUSINESS AND EVEN IF THE MANUFACTURING OR PRODUCTION ACTIVITY IS CARRIED OUT FOR ANO THER ENTERPRISES THERE IS NO BAR. THE MANDATE OF THE SAID PROVISION IS TH AT THE MACHINERY OR PLANT SHOULD BE NEW AND WHICH HAS BEEN ACQ UIRED AND INSTALLED AFTER 31-03-2005 AND THE ASSESSEE ACTIVITY SHOU LD BE THE MANUFACTURE AND PRODUCTION OF ANY ARTICLE OR THING. SO FAR AS THE BAR PROVIDED IN PROVISO BELOW SECTION 32(1)(IIA) IS CONCERNED IT IS NOT DISPUTED BY BOTH THE AUTHORITIES BELOW THAT THE SAID BAR IS APPLICABLE TO THE ASSESSEES CASE. 9. THE ASSESSING OFFICER HAS RELIED ON THE DECISION OF THE H ON'BLE SUPREME COURT IN THE CASE OF GUPA GLOBAL MAXIM PVT. LTD (S UPRA). THE ISSUE BEFORE THEIR LORDSHIPS WAS IN RESPECT OF RATE OF DEPR ECIATION ON THE TAILOR AND LOADERS AND NOT THE ADDITIONAL DEPRECIATION. IN OUR OPINION, THE DECISION IN THE CASE OF GUPTA GLOBAL MAXIM PVT. LTD. (SUP RA) IS RENDERED ON DIFFERENT ISSUE. WE, THEREFORE, HOLD THAT BOTH THE AUTHORITIES BELOW HAVE ERRED IN DENYING THE CLAIM OF THE ADDITIONAL DEPR ECIATION TO THE ASSESSEE. ACCORDINGLY, THE GROUNDS TAKEN BY THE A SSESSEE ARE 13 ITA NO.491/PN/2010, M/S. SHRI BHARAT CEMENT, KOLHAP UR ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE AD DITIONAL DEPRECIATION TO THE ASSESSEE. PRONOUNCED IN THE OPEN COURT ON 10-04-2013 SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER RK/PS PUNE, DATED: 10 TH APRIL, 2013 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A), KOLHAPUR 4 THE CIT - I/II, KOL HAPUR/CIT(C), PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE