ACIT, CHENNAI vs. MAHAVEER SAFETY GLASS PVT LTD., CHENNAI

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ITA 1148/CHNY/2017Status: DisposedITAT Chennai27 November 2017AY 2004-054 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that filing Form 3AA during assessment proceedings, even if not filed with the return, constitutes sufficient compliance for claiming additional depreciation. Therefore, the assessee is entitled to the additional depreciation.

What were the facts?

The assessee claimed additional depreciation but failed to furnish Form 3AA with the return. The Assessing Officer disallowed the claim, but the assessee submitted the form during assessment proceedings. The CIT(A) allowed the claim, following a Supreme Court decision.

What were the issues?

Whether failure to file Form 3AA along with the return of income bars the claim for additional depreciation when it is filed during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 32(1)(iia)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

For Respondent: Shri. G. Baskar, Advocate
Hearing: 21.11.2017Pronounced: 27.11.2017

आदेश/ O R D E R

PER S. JAYARAMAN, ACCOUNTANT MEMBER:

1.

The revenue filed this appeal against the order of the Commissioner of Income Tax (Appeals)-8, Chennai in dated 03.03.2017 for the assessment year 2004-05.

:-2-: ITA No. 1148/Mds/2017

2.

M/s. Mahaveer Safety Glass Pvt. Ltd., presently known as Fuso Glass (India) Ltd., is engaged in the business of manufacturing of dealing in glass. In the assessment made for the assessment year 2004-05, the AO found that the assessee claimed additional depreciation u/s. 32(1)(iia) at Rs. 78,69,122/- and noted that it failed to furnish Form No. 3AA towards additional depreciation claim with the return. When the assessee was asked to show cause why the additional depreciation should not be disallowed, it submitted the required report u/s. 32(1)(iia) , pleaded that it inadvertently omitted to enclose with the return and the same may be condoned. The AO refused to allow the additional depreciation stating that the required compliance was a mandatory one and the assessee has failed to do so.

Aggrieved, the assessee filed an appeal before the CIT(A). The CIT(A) held that admittedly, Form 3AA was filed in the course of assessment proceedings.

Following the Supreme Court decision in the case of CIT vs G.M. Knitting Industries Pvt. Ltd., 376 ITR 456(SC) , the CIT (A) allowed the assessee’s appeal. Aggrieved, the revenue filed this appeal with the following grounds:

“2. The CIT(A) erred in deleting the disallowance on the claim of additional depreciation u/s. 32(1)(iia) of Rs. 78.69 lakhs 2.1 The CIT(A) erred in not appreciating the contention of the AO that the provisions of section 32(1)(iia) is mandatory provision and it uses the words “.... no deduction shall be allowed” and hence the additional depreciation cannot be allowed as the assessee had failed to furnish the details in the prescribed format.

:-3-: ITA No. 1148/Mds/2017

2.2 The CIT(A) erred in accepting the claim of the assessee as the same is contrary to the provisions of third proviso to clause (iia) of sub-section(1) of section. 2.3 The CIT(A) erred in not appreciating that the assessee failed to furnish Form 3AA along with return of income as per Rule 5A of the Income Tax Rules and hence the AO is justified in making the disallowance on the claim of additional depreciation.”

3.

We heard the rival contentions. The Hon’ble Supreme Court of India in the case of CIT vs G.M. knitting Industries Pvt. Ltd., 376 ITR 456 held that “Even if form 3AA (in which the report of an accountant is to be filed under rule 5A of the Income –tax Rules,1962) for claiming additional depreciation u/s 32(1) (iia) of the Income-tax Act,1961, was not filed along with the return of income but was filed during assessment proceedings before final order of assessment was made that would amount to sufficient compliance for grant of additional depreciation in terms of section 32(1) (iia) of the Act”.

Hence, the assessee is entitled for the additional depreciation. The order of the CIT (A) does not require any interference. The Revenue’s appeal is dismissed.

4.

In the result, the Revenue’s appeal is dismissed.

:-4-: ITA No. 1148/Mds/2017

Order pronounced on Monday, the 27th day of November, 2017 at Chennai.

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