SUDARSHAN JEANS PRIVATE LIMITED,MAHARASHTRA vs. INCOME TAX OFFICER, WARD NO. 1, AMBALA, AMBALA

ITA 705/CHANDI/2026Status: DisposedITAT Chandigarh01 October 2026AY 2016-174 pages
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What did the Tribunal hold?

The Tribunal held that the issue was covered in favor of the assessee by its own prior decision for AY 2015-16. The Tribunal noted that Appendix-1 of the Income Tax Rules prescribes a 10% depreciation rate for furniture and fittings, including electrical fittings. However, the material on record indicated that the electrical installation expenditure included items like transformers, machine panel boards, metal detectors, spark detectors, and yarn conditioning machines, which were indispensable for the manufacturing process and functionally inseparable from the plant and machinery. Therefore, these expenditures were integral to Plant & Machinery. The Tribunal relied on the ratio of the Punjab & Haryana High Court in Oswal Woollen Mills Ltd. (289 ITR 261) and the Delhi Tribunal in Nalwa Steel Power Ltd. (ITA No.4559/Del/2010 dated 09-08-2016), which held that electrical installations and transformers constitute an integral part of Plant & Machinery eligible for investment allowance and depreciation. Consequently, the Tribunal directed the AO to allow the impugned additional depreciation to the assessee as per its claim. No other grounds were urged.

What were the facts?

The assessee, M/s Sudarshan Jeans Private Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2016-17. The appeal challenged an order dated 17.12.2025 passed by the Commissioner of Income Tax (Appeals), NFAC, which upheld the Assessing Officer's (AO) order dated 21.03.2022, framed under Section 147 r.w.s. 144B of the Income Tax Act, 1961. The core dispute involved the assessee's claim for additional depreciation under Section 32(1)(iia) on electrical installations amounting to Rs. 41.11 Lacs, which the assessee considered an integral part of Plant & Machinery eligible for such depreciation. The AO had denied this claim, while allowing regular depreciation of 15%. The ITAT noted a delay of 25 days in filing the appeal, which was condoned.

What were the issues?

1. Whether electrical installations, claimed by the assessee to be integral to Plant & Machinery, are eligible for additional depreciation under Section 32(1)(iia) of the Income Tax Act, 1961? (Question of law and fact) Assessee's contentions: The assessee argued that the electrical installations were integral to its Plant & Machinery and therefore eligible for additional depreciation. The assessee relied on the Tribunal's own decision in its case for AY 2015-16 (ITA No.1070/Chandi/2024 dated 30.12.2025) which supported its claim. The assessee also submitted a Chartered Engineer's certificate to this effect. Revenue's contentions: The revenue contended that the Chartered Engineer's certificate was furnished after the installation of machinery and was not supported by any technical drawings. The revenue argued that the electrical installations were not eligible for additional depreciation.

Which sections of the Income-tax Act were involved?

Section 32(1)(iia),Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

Manoj Kumar Aggarwal (Accountant Member)

1.

Aforesaid appeal by assessee for Assessment Year (AY) 2016-17 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 17.12.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 21.03.2022. The registry has noted delay of 25 days in the appeal which stand condoned. The sole i

The order continues below.

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