COMMISSIONER OF INCOME TAX MADURAI Vs. VTM LIMITED

JUDGEMENT

(1.) THE Revenue has come forward with this appeal, raising the following substantial questions of law:

(2.) WE heard Ms. Pushya Sitaraman, learned Standing Counsel appearing for the appellant. The learned counsel in his submissions contended that the Tribunal under similar circumstances earlier disallowed the additional depreciation claimed under Section 32(1)(iia) of the Income Tax Act, whereas by the impugned order, the Tribunal has taken a diplomatic opposite view and on this ground itself the order is liable to be set aside. The learned counsel then contended that the additional depreciation was claimed on the setting up of wind mills for generation of power and inasmuch as the assessee is only engaged in the manufacture of textile goods, the setting up of a wind mill has absolutely no connection for the manufacture of textile goods, which is the power industry and therefore, the assessee was not entitled to claim the additional depreciation as allowed under Section 32(1)(iia) of the Act.

(3.) IN the case on hand, the assessee is stated to have set up a wind mill at a cost of Rs.5,85,60,000/- It is true that the assessee is a company engaged in the business of manufacture of textile goods. As far as application of Section 32(1)(iia) of the Act, is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31st March 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed upto 31.03.2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a wind mill has nothing to do with the power industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in Section 32(1)(iia) of the Act.