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CBDT Circular On Allowability Of Additional Depreciation U/s 32(1)(iia) of the Income-tax Act, 1961

The CBDT has issued Circular No. 15/2016 dated 19.05.2016 in which it has dealt with the issue of allowability of additional depreciation u/s 32(1)(iia) of the Income-tax Act, 1961 in the context of the judgements of the Kerala and Delhi High Courts in Mathrubhoomi Printing & Publishing Co. and Delhi Press Patra Prakashan Ltd.


Circular No. 15/2016

F. No. 279/Misc/140/2015/ITJ
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi, 19th May, 2016

Subject: Additional Depreciation u/s 32(1)(iia) of the Income Tax Act, 1961 -reg.

An assessee, engaged in the business of manufacture or production of an article or thing, is eligible to claim additional depreciation under clause (iia) of sub-section (1) of section 32 of the Income-tax Act, 1961 (hereinafter referred to as the Act) in addition to the depreciation allowance under sub-section (1) of section 32 of the Act.

2. Whether or not an assessee engaged in printing or printing and publishing is eligible for grant of additional depreciation under clause (iia) of sub-section (1) of section 32 of the Act, has been a contentious issue. In other words, whether printing or printing and publishing amounts to manufacture or production of article or thing has been contested in legal forums.

3. The Hon’ble Kerala High Court in the case of Mathrubhoomi Printing & Publishing Co. vide its judgment’ dated 16.2.2015 in ITA No 23 of 2015 relied upon the Hon’ble Delhi High Court judgement dated 31.5.2013 in 1TA No 49 of 1996 in the case of Delhi Press Patra Prakashan Ltd.2 and held that printing and publishing activity is a manufacturing activity and therefore, assessee is eligible for grant of additional depreciation u/s 32(1)(iia).

4. The Board has accepted the position that printing or printing and publishing amounts to manufacture or production of article or thing. The judgments of Hon’ble Delhi and Kerala High Courts on this issue have been accepted. Thus the issue relating to grant of deprecation u/s 32(1) (iia) has not been further contested, though the Delhi High Court judgment has been contested on other issues.

5. It is, therefore, a settled position 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 u/s 32(l)(iia) of the Act. Henceforth, appeals may not be filed on this ground by officers of the Department and those already filed, in Courts/Tribunals may be withdrawn / not pressed upon.

6. The above may be brought to the notice of all concerned.
(Sadhana Panwar)
DCIT (OSD)(ITJ),
CBDT; New Delhi.


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