INCOME TAX ACT, 1961

Section 32(1)(iia)

Depreciation - Additional depreciation - Process of blending of butane and propane, whether was a manufacturing activity -

Assessee-company was engaged in the business of manufacturing, trading and terminalling/bottling of liquefied petroleum gas. Issue for consideration was whether process of blending of butane and propane was a manufacturing activity so that assessee was eligible to claim additional depreciation under section 32(1)(iia). Held: In the process of blending of butane and propane which was carried out in scientific manner with use and aid of sophisticated plant and machinery, transformation was brought about and entirely new product by the name LPG was obtained. The said object or product, i.e., LPG was known to the trade and commerce by its separate distinctive commercial name and it had a different character and its end use was also different. LPG is subjected to levy of Central Excise Duty and Excise Department which also falls under the department of revenue collects substantial amount of excise duty on the footing that the assessee is engaged by manufacture of an article or product. Accordingly, assessee was engaged in manufacture or production of an article or thing and, therefore, it was eligible for claiming additional depreciation under section 32(1)(iia).

Followed:Dy. CIT, Cir-10(1), Kolkata v. Indian Oil Petronas Pvt. Ltd. ITA No. 1930/Kol/2016 Order, dated 15-3-2019 : 2019 TaxPub(DT) 2445 (Kol-Trib)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 253(5)

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