M/S. WHEELS INDIA LTD., vs. THE DEPUTY COMMISSIONER

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TCA/986/2015HC Madras2026/MHC/413206 October 2026Bench: Honourable Dr.Justice ANITA SUMANTH4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, holding that the assessee is entitled to the balance 50% of additional depreciation. The Court noted that this issue had already been decided in favour of the assessee in their own case, Wheels India Ltd. v. Assistant Commissioner of Income-tax (LTU Appeals) [(2026) 310 Taxman 168 (Madras)]. Therefore, the questions of law were answered in favour of the assessee. The Tribunal's order was set aside to the extent it denied the balance additional depreciation. The operative direction was to allow the claim of the assessee. No issue was expressly left undecided.

What were the facts?

The assessee, M/s. Wheels India Limited, filed an appeal before the High Court of Judicature at Madras challenging an order dated 14.03.2014 passed by the Income Tax Appellate Tribunal (Tribunal). The appeal pertains to Assessment Year 2006-07. The core of the dispute concerns the assessee's entitlement to the balance 50% of additional depreciation on assets acquired in the previous year and put to use for less than 180 days. The Tribunal had previously ruled against the assessee on this point. The procedural history involves the assessee filing a Tax Case (Appeal) under Section 260-A of the Income Tax Act, 1961, against the Tribunal's order.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is not entitled for the balance 50% of additional depreciation in the current assessment year in respect of assets acquired in the previous year and put to use for less than 180 days, as per Section 32(1)(iia) of the Income Tax Act, 1961? 2. Whether on the facts and in the circumstances of the case and in law, the entitlement to additional depreciation under Section 32(1)(iia), which is vested as an incentive for investments in new plant and machinery, can be divested by the second proviso to Section 32(1) which restricted it to 50%? 3. Whether on the facts and in the circumstances of the case and in law, the Tribunal ought to have appreciated that the second proviso to Section 32(1) only restricts the quantum of depreciation allowable in the first year of use but in no way restricts or reduces the total amount of additional depreciation allowable in respect of eligible plant and machinery? Assessee's Contentions: The assessee contended that the balance 50% of additional depreciation should be allowed to be carried forward to the subsequent year. The assessee relied on the decision in their own case, Wheels India Ltd. v. Assistant Commissioner of Income-tax (LTU Appeals) [(2026) 310 Taxman 168 (Madras)]. Revenue's Contentions: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 32(1),Section 32(1)(iia),Section 260-A

AI-generated summary — verify with the full judgment below

2026:MHC:4132 TCA No. 986 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 06-10-2026 CORAM THE HON'BLE DR.JUSTICE ANITA SUMANTH AND THE HON'BLE MR.JUSTICE K.RAJASEKAR TCA No. 986 of 2015 CNR:{HCMA010527152015} M/s. Wheels India Limited, Padi, Chennai- 600 050. ..Appellant(s) Vs The Deputy Commissioner of Income Tax, Large Taxpayer Unit (Appeals), Chennai - 600 101. ..Respondent(s) Prayer: Tax Case (Appeal) filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras ‘A’ Bench, Chennai dated 14.03.2014 in I.T.A.No.43/Mds/2010 for A.Y. 2006-07. For Appellant(s): Mr.R.Venkatanarayanan for Mr.Subbaraya Aiyar For Respondent(s): Ms.V.Pushpa, Senior Standing Counsel Judgment (Judgment of the Court was delivered by Dr.Anita Sumanth J.) This is an appeal at the instance of the assessee challenging order dated 14.03.2014 of the Income Tax Appellate Tribunal (Tribunal) for the assessment year 2006 – 07. The substantial questions of law admitted on 27.10.2015 are as follows:- __________ Page 1 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 08/10/2026 04:56:45 pm ) 2026:MHC:4132 TCA No. 986 of 2015 1. Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that assessee is not entitled for balance 50% of additional depreciation in the current assessment year in respect of assets acquired in previous year and put to use for less than 180 days? 2.Whether on the facts and in the circumstances of the case and in law the entitlement to additional depreciation u/s.32(iia) which is vested as incentive for investments in new plant and machinery can be divested by the second proviso to Sec.32(1) which restricted it to 50 per cent? 3.Whether on the facts and in the circumstances of the case and in law the Tribunal ought to have appreciated that second proviso to Sec.32(1) only restricts the quantum of depreciation allowable in the first year of use but in no way restricts or reduces the total amount of Additional depreciation allowable in respect of eligible plant and machinery? 2. The issue relates to whether the balance of additional depreciation of 50% of which 50% had been claimed in the first year, may be carried forward to the subsequent year. This issue has been answered in the assessee’s own case in Wheels India Ltd. v. Assistant Commissioner of Income-tax (LTU Appeals) [(2026) 310 Taxman 168 (Madras)] accepting the claim. Hence, the questions of law are answered in favour of the assessee. 3. This Tax Case (Appeal) is allowed. No costs. (A.S.M.,J.) (K.R.S.,J.) 06-10-2026 mpl Index: Yes/No Speaking order Neutral Citation: Yes __________ Page 2 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 08/10/2026 04:56:45 pm ) 2026:MHC:4132 TCA No. 986 of 2015 To 1.The Deputy Commissioner of Income Tax, Large Taxpayer Unit (Appeals), Chennai - 600 101. 2.The Income Tax Appellate Tribunal, Madras ‘A’ Bench, Chennai __________ Page 3 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 08/10/2026 04:56:45 pm ) 2026:MHC:4132 TCA No. 986 of 2015 DR.ANITA SUMANTH J. AND K.RAJASEKAR J. mpl TCA No. 986 of 2015 06-10-2026 __________ Page 4 of 4 https://www.mhc.tn.gov.in/judis ( Uploaded on: 08/10/2026 04:56:45 pm )

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