Pramod Kumar, J. - (1.) THIS assessees appeal is directed against the order dated 8 -1 -1996, passed by the learned Commissioner (Appeals) Calcutta XII, in the matter of order under section 143(3) for the assessment year 1992 -93. Although the assessee has raised as many as nine grounds of appeal, the grievances of the assessee can be summed up in four categories, namely, (a) grievances against Commissioner (Appeals)s not allowing 100 per cent depreciation on Vibro Fluid Bed Drier costing Rs. 34,07,135; (b) grievances against Commissioner (Appeals)s upholding addition of Rs. 5,16,493 to the closing stock, on account of cess(c) grievances against Commissioner (Appeals)s holding that section 80HHC deduction is to be worked out after apportioning the income under rule 8; and (d) grievances against Commissioner (Appeals)s. holding that commission paid to sales agents is to be excluded for determining export turnover for the purpose of section 80HHC. We, accordingly, proceed to take up these four sets of grievances of the assessee one by one.
(2.) THE assessee -company is in the business of growing, manufacturing and selling tea. During the course of assessment proceedings, assessees claim of 100 per cent depreciation on Vibro Fluid Bed Drier (hereinafter referred to ass VFBD) was restricted to 25 per cent depreciation, as applicable on normal machinery, by the assessing officer in appeal, the assessee submitted that VFBD was an energy saving eligible for 100 per cent depreciation under clause III 3(iii) A of by Appendix I of the Income Tax Rules, 1962. It was also submitted that the assessing officer had not disputed that installation of VFBD has resulting in energy savings and, therefore, VFBD are entitled to 100 per cent depreciation on specialized boilers and furnaces. The Commissioner (Appeals), however, was of the opinion that not every energy saving device is entitled to 100 per cent depreciation but only such energy saving devices were entitled to 100 per cent of depreciation which are, specialised boilers and furnaces of the nature referred to in III, (3)(iii)A of Appendix I or waste heat recovery equipment referred to in the nature referred to in III. 3(iii) A of Appendix I. Accordingly, the Commissioner (Appeals) upheld the disallowance of depreciation by the assessing officer, aggrieved by which the assessee is in appeal before us. Rival contentions are heard, records perused and authorities cited at the bar deliberated upon.
(3.) WE find this issue is squarely covered by earlier decisions of this Tribunal, including by the case of Dy. CIT v. Assam Brook Ltd. (ITA No. 370/Cal/1996), in which it has been held that VFBD is eligible for 100 per cent depreciation. We see no reasons to take a contrary view and, accordingly, we direct the assessing officer allow 100 per cent depreciation on the Vibro Fluid Bed Drier. In the result the assessee succeeds on this count and thus ground Nos. 1 and 2 are allowed. Second grievance of the assessee is against Commissioner (Appeals)s upholding the addition of Rs. 5,16,493 to the closing stock on account of cess. During the course of assessment proceedings, it was observed by the assessing officer that though cess on green leaf is direct cost of production, it has not been taken into account in the valuation of closing stock. During the relevant previous year, cess of Rs. 63,49,107 was paid on 1,59,95,882 kgs. of green leaves, and pro rata cess for 8,83,696 kgs. in closing stock came to Rs. 5,15,498 which was added to the closing stock of the assessee. In appeal, learned Commissioner (Appeals) upheld the addition on the ground that unlike excise duty, which is paid on production, cess is paid on the green leaves at the time of purchase and, therefore, cess ought to be taken into account for valuation of closing stock even at purchase price. Aggrieved by the order of the Commissioner (Appeals) assessee is in appeal before us.;