Activity of Printing & Publishing amounts to “Manufacure” & Eligible for Additional Depreciation u/s 32(1)(iia): ITAT Kolkata [Read Order]

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The Kolkata bench of Income Tax Appellate Tribunal, in recent ruling held that, the activities of printing & publishing are eligible for additional depreciation under section 32(1)(iia) of the Income Tax Act, 1961 on ground that they are in the nature of “manufacture.” The Tribunal relied upon the decision of the Supreme Court in Ujagar Prints and the Circular of CBDT dated 19.05.2016.

The assessee-company is engaged in the activity of business of publication of daily Newspaper, Weekly and Monthly Magazine. The Assessing Officer allowed additional depreciation claimed on addition to plant and machinery, which has been acquired by the assessee, as per section 32(1)(i ia) of the Act. The AO was of the opinion that the assessee, being a company engaged in the business of manufacture or production of any article or thingare eligible to such deduction.

However, the Commissioner of Income Tax (Appeals) by exercising its power under section 263,set aside the order by holding that it was erroneous as well as prejudicial to the interest of the revenue. Accordingly, the CIT(A) initiated proceedings against the assessee.

The assessee maintained that they are eligible for the said exemption under the provisions of section 32(1)(i ia) of the Act. They further relied upon the decision in Ujagar Prints [179 ITR 317] in which the Supreme Court held that the job of printing was in the nature of manufacturing and, therefore, it was entitled for additional depreciation under section 32(1)(i ia) on the addition made to plant and machinery.However, the CIT(A) rejected the contentions of the assessee and reiterated that the said order was erroneous and prejudicial to the revenue.

The Tribunal found that the issue as to whether job of printing is manufacturing or not so as to be eligible for additional depreciation as per section 32(1)(i ia) squarely covered on merit by the various judicial pronouncements. Further, the Tribunal observed that as per the Circular No. 15/2016 issued on 19thMay, 2016, the CBDT clarified that the business of printing or printing and publishing amounts to manufacture or production of an article or thing and is accordingly eligible for additional depreciation under section 32(1)(i ia) of the Act.

In view of the above findings, the Appellate Tribunal restored the order of the Assessing Officer by quashing the order of CIT(A).

Read the full text of the order below.

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