Respected members
An assessee is engaged in the business of refining lubricating oil. Whether additional depreciation is allowed in case of purchase of machinery that is used for refining lubrication oil?
In my preciatioview addn. depreciation is available only on production/manufacturing... And refining is different from production.. In refining there is neither any production nor manufacture.
Correct me if I am wrong
·Conditions for claiming Additional depreciation over & above Normal depreciation:
|
Condition |
Descripttion |
|
I |
It is allowable to all assesses engaged in the manufacture/ production of any article/ item/ thing. |
|
II |
New Plant & Machinery should be acquired & installed after 31st March’ 2005: · Additional depreciation is not allowable in respect of Buildings & Furniture or Old Plant & Machinery. · The condition of Acquisition & Installation of Plant & Machinery should be satisfied simultaneously, on failure of which additional depreciation cannot be claimed on same. |
|
III |
Additional Depreciation claim is available only in case of Eligible Plant & Machinery, wherein all Plant & Machineries are eligible except the following: · Ships & Aircrafts; or · Any machinery/ plant which is and Old/ Second hand. · Any machinery/ plant installed in any office/ residential accommodation/ guest house accommodation. · Any machinery/ plant whose total actual cost is allowed as a deduction in computing business income in any if one previous years. |
|
IV |
The rules of 180 days or above for calculating normal depreciation are applicable in case of calculation of additional depreciation. |
S.2 (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;
so possibly, a refined oil would have different chemical composition from crude oil and it also has distinct identity from crude lubricating oil
In my view, this activity would amount to manufacture and qualify for additional depreciation
I have the same opinion as Mansha on the same grounds
New products are created in the process of refining which are different from others, products are also changed
Hi Mansha & Z, u guys are right. Just refer this case law https://indiankanoon.org/doc/1036145/
| Originally posted by : C.A. M.Com. Suhas A. Nagpure | ||
 |
·Conditions for claiming Additional depreciation over & above Normal depreciation: Condition Descriptttion I It is allowable to all assesses engaged in the manufacture/ production of any article/ item/ thing. II New Plant & Machinery should be acquired & installed after 31st March’ 2005: · Additional depreciation is not allowable in respect of Buildings & Furniture or Old Plant & Machinery. · The condition of Acquisition & Installation of Plant & Machinery should be satisfied simultaneously, on failure of which additional depreciation cannot be claimed on same. III Additional Depreciation claim is available only in case of Eligible Plant & Machinery, wherein all Plant & Machineries are eligible except the following: · Ships & Aircrafts; or · Any machinery/ plant which is and Old/ Second hand. · Any machinery/ plant installed in any office/ residential accommodation/ guest house accommodation. · Any machinery/ plant whose total actual cost is allowed as a deduction in computing business income in any if one previous years. IV The rules of 180 days or above for calculating normal depreciation are applicable in case of calculation of additional depreciation. |
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