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05-12-2018, Tata Steel Processing, Section 263, 32, 32(1)(iia),Tribunal Kolkata

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5 months 2 weeks ago #7974 by amit
Section - 263, 32, 32(1)(iia), 43B(f), 24(2)
Order Date - 05-12-2018
Favouring - Assessee Partly
Court - Tribunal Kolkata
Appellant - ACIT
Respondent - Tata Steel Processing and Distribution Ltd.
Justice - S.S.Godara, JM & M.Balaganesh, AM
Citation - 1218Taxpundit124
Appeal No. - I.T.A No. 2237/Kol/2016
Asstt. Year - 2011-12


PER : M.Balaganesh, AM

1. This appeal by the Revenue and the Cross objection by the Assessee arise out of the order of the Learned Commissioner of Income Tax(Appeals)-2, Kolkata [in short the ld CIT(A)] in Appeal No. 59/CIT(A)-2/16-17 dated 08.09.2016 against the order passed by the DCIT, Circle-8, Kolkata [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 15.03.2014 for the Assessment Year 2011-12.

I.T.A. No. 2237/Kol/2016 – Revenue appeal

2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in granting allowance of remaining portion of 50% of additional depreciation u/s 32(i)(iia) of the Act on assets put to use for a period of less than 180 days during the financial year 2009-10 relevant to assessment year 2010-11

3. Brief facts of this issue is that the assessee installed certain plant and machinery in assessment year 2010-11 and had used the same for less than 180 days during that year. The assessee claimed 50% of additional depreciation eligible during assessment year 2010-11. The remaining 50% portion of Rs. 99,19,911/- was claimed in assessment year 2011-12 was sought to be disallowed by the ld. AO on the ground that unclaimed 50% of additional depreciation pertaining to earlier assessment year cannot be claimed as an allowance in the year under appeal. The Ld. CIT(A) on placing reliance on various decisions of High Courts deleted the said disallowance. Aggrieved the revenue is in appeal before us.

4. We find this issue is already settled in favour of assessee in its own case by the order of this tribunal in I.T.A. No. 508/Kol/2016 for assessment year 2010-11 dated 24.08.2018 wherein it was held as under:

4.2. We have heard rival submissions. We find that this issue is no longer res integra in view of the decision of Hon’ble Madras High Court in the case of CIT vs. Shri T. P. Textiles Pvt. Ltd. reported in 394 ITR 483 (Mad) wherein it was held as under:

“6.1. Therefore, the only issue, which arose for consideration before the Tribunal was, whether the additional depreciation, in the sum of Rs. 8,03,233/- could be claimed by the assessee in the relevant assessment year, i.e., the assessment year 2011-12, in respect of machinery, which was purchased and used for less than 180 days, in the previous year, 2009-10 (i.e., the assessment year 2010-11).

7. The Tribunal, relying upon its own judgment in the case of Fresh & Honest Cafe Ltd. V. DCIT, dated 10.08.2016, passed in I.T.A.No.1373/Mds/2016 allowed the appeal of the Assessee.

7.1. Pertinently, in the judgment of the Tribunal, delivered in the case of Fresh & Honest Cafe Ltd. V. DCIT, reliance was placed on the judgment of the Karnataka High Court in the case of : CIT V. Rittal India (P.) Ltd., [2016] 66 4 (Karnataka).

7.2. The issue, which arose for consideration before the Tribunal in the Fresh & Honest Cafe Ltd. V. DCIT, was also, whether the Assessee could be allowed balance additional depreciation in the relevan A.Y., following the A.Y., in which, the machinery had been purchased, and put to use, albeit, for a period of less than 180 days.

7.3. The Tribunal has, thus, in the context of the provisions of Section 263 of the Act, considered, as to whether the assessment order, as passed, qua the issue encapsulated above, erroneous and/or prejudicial to the interest of the Revenue.

7.4. In order to appreciate the issue at hand, relevant provisions of Section 32 of the Act, to the extent applicable in the A.Y. in issue, would be required to be noticed :

"Sectio 32 (1) In respect of depreciation of –

(i) buildings, machinery, plant or furniture, being tangible assets;

(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -

(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed;

(ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: Provided further that where an asset referred to in clause (i) or clause (ii) or clause

(iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one

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