Assessee held eligible for claim of dep. as manufacturer u/s 10B (of Income Tax Act, 1961).

Facts in Brief:

1. Assessee filed the return of income for declaring a total income under the normal provisions and book profits u/s 115JB (of Income Tax Act, 1961).

2. In the assessment, AO determined the total income of the assessee at Rs 23,66,50,830/- by making the following additions:

a. Disallowed the claim of deduction u/s 10B (of Income Tax Act, 1961) of Rs. 17,77,41,695/-

b. Additional depreciation disallowed Rs. 89,51,641/-.

3. AO held that the business of the Assessee Company said to be reconstituted or reconstruction of a business already in existence involving transfer to new business of lease hold right held by its sister-concern. Hence, assessee fails to fulfill the condition laid down in section 10B(2) (of Income Tax Act, 1961).

4. On appeal, CIT(A) observed that the factual position regarding the disallowance of deduction u/s 10B (of Income Tax Act, 1961) is same as was prevailing for the AY 2009-10. He, therefore, following the decision in AY 2009-10, held that assessee's business of cutting, sizing, polishing and slicing of granites make him eligible for claiming deduction u/s 10B (of Income Tax Act, 1961). Accordingly, he allowed the claim of assessee.

On appeal ITAT held,

5. As the business of the assessee is proved beyond doubt that it involves in the manufacturing activities, in the result, it is eligible to claim deduction u/s 10B (of Income Tax Act, 1961) as well as it is eligible to claim additional depreciation, as the same was eligible to be claimed by those assessees who are in the business of manufacture or production of any article or thing. Hence, in our opinion, the assessee is eligible to claim additional depreciation as a manufacturer. Accordingly, the ground raised by the revenue is dismissed.

Case Reference - Midwest Granites Pvt Ltd., ... vs Department Of Income Tax.