Depreciation – Additional depreciation – Section 32(1)(iia) – A. Y. 2008-09 – Assessee is engaged in the business of FM radio broadcasting, producing, recording, editing and making copies of the radio programme amounts to manufacture/production of article or things – Radio programme produced is “thing” if not an “article” as Dictionary meaning of the word envisages that “thing” could have intangible characteristic – Assessee is entitled to additional depreciation

Assessee is engaged in the business of FM radio broadcasting. In the A. Y. 2008-09, the assessee had claimed additional depreciation u/s. 32(1)(iia). AO rejected the Assessee’s contention that the above radio programmes were “the articles or things produced by it”. The AO held that “by no stretch of imagination can ‘production of radio programmes’ be considered as ‘production of article or thing’. The additional depreciation claimed was disallowed. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:

“i) Radio programme produced is “thing” if not an “article” as Dictionary meaning of the word envisages that “thing” could have intangible characteristic. The production of radio programmes involved the processes of recording, editing and making copies prior to broadcasting.

ii) When the radio programmes is made there comes into existence a ‘thing’ which is intangible, and which can be transmitted and even sold by making copies. ‘manufacture’ could include a combination of processes. In the context of ‘broadcast’ it could encompass the processes of producing, recording, editing and making copies of the radio programme followed by its broadcasting. The activity of broadcasting, in the above context, would necessarily envisage all the above incidental activities which are nevertheless integral to the business of broadcasting.

iii) In that view of the matter, the Assessee can be said to have used the plant and machinery acquired and installed by it after 31st March 2005 for manufacture/ production of an ‘article or thing.’

 iv) Since the Assessee has satisfied the requirements of Section 32 (1) (iia) of the Act, it is entitled to the additional depreciation as claimed by it for the assessment year in question.”