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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: SHRI DUVVURU RL REDDY & SHRI S. JAYARAMAN
आदेश /O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER:
The Revenue filed this appeal against the order of Commissioner of Income Tax (Appeals)-17, LTU, Chennai in dated 08.06.2017 for assessment year 2011-12.
While making the assessment for assessment year 2011-12, in the assessee’s case, i.e., Wheels India Ltd., the Assessing Officer, inter alia, noted that the assessee has claimed additional depreciation during the year @ 10% (50% of 20%) in respect of the additions made to plant and machinery in the second half of the preceding assessment year i.e.., in assessment year 2010-
Since , the additions to fixed assets were made in the second half of that assessment year, for the balance 50% of additional depreciation, the assessee claimed during this assessment year. The AO did not accept the claim.
Further, he found that the assessee had claimed depreciation @ 60% on the value of UPS (uninterrupted power supply system). The AO held that since the UPS is not a data processing equipment, he treated UPS as a plant and machinery and allowed depreciation @ 15%. The assessee claimed Leave Encashment Provision relating to the R & D unit eligible for weighted deduction u/s. 35(2AB). The AO refused it u/s. 43B(F).
Aggrieved, the assessee filed an appeal before the CIT(A). On the issue of additional depreciation, though this ITAT in & 396/Mds/2014 dated 26.09.2014 for assessment year 2010-11 had decided this issue against the assessee , the CIT(A) after considering this ITAT decision in other cases and applying ratio of the Madras High Court decision in the case of Brakes India Pvt. Ltd., Padi vs DCIT, LTU in TCA No. 551 of 2013 dated 14.03.2017 allowed the assessee’s plea. In respect of disallowance towards depreciation on UPS, the CIT(A) following this tribunal decision in ITA No 396/Mds/2014 dated 26.09.2014 in the assessee’s case for assessment year 2010-11 and the Delhi High Court decision in the case of CIT vs Orient Ceramics & Industries Ltd 56 DTR 397 (Del), allowed the assessee’s plea holding that UPS should be treated as part of computer hardware. On the disallowance of weighted deduction claimed u/s. 35(2AB), but disallowed 43B, related to R & D unit, the CIT(A) relying on High Court of Calcutta in 292 ITR 470 and this tribunal decisions in the case of IOB vs DCIT in ITA No 1815/Mds/2011 dated 02.04.2013 and in the assessee’s case in ITA no 379/Mds/2014 dated 26.09.2014 for assessment year 2007-08 allowed the assessee’s plea. Aggrieved, the Revenue filed this appeal.
We heard the rival submissions and gone through the relevant orders.
On the issue of additional depreciation, since the CIT(A) has applied the ratio of the Jurisdictional High Court, we do not find any reason to interfere with her order on that issue. On the issue of disallowance of depreciation on UPS, since the CIT(A) followed the decision of this tribunal in the assessee’s own case, her order on that issue requires no interference. On the issue of disallowance of weighted deduction on expenditure disallowed 43B related to R & D unit also, the CIT(A) followed the decision of this tribunal in the assessee’s own case, we do not find any reason to interfere with the order of :-4-: CIT(A) on this issue. Thus, all the grounds of the Revenue appeals are dismissed.
In the result, the Revenue’s appeal is dismissed.
Order pronounced on Tuesday, the 24th day of April, 2018 at Chennai.