The Commissioner of Income Tax-1 vs. Harmahendar Singh Bagga

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS MONDAY, THE 2ND DAY OF AUGUST 2021 / 11TH SRAVANA, 1943 ITA NO. 184 OF 2015 AGAINST THE ORDER IN IT (TP)A 2/2014 OF I.T.A.TRIBUNAL,COCHIN BENCH, ERNAKULAM APPELLANT/S: THE COMMISSIONER OF INCOME TAX-1, KOCHI. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT RESPONDENT/S: M/S.APPOLLO TYRES LTD., SHANMUGAM ROAD, ERNAKULAM - 682 031. BY ADVS. SRI.V.ABRAHAM MARKOS SRI.V.ABRAHAM MARKOS SRI.ABRAHAM JOSEPH MARKOS SRI.GOVIND VIJAYAKUMARAN NAIR SRI.HARAN THOMAS GEORGE SRI.ISAAC THOMAS SRI.JOSEPH MARKOSE SR. THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 02.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

I.T.A. No.184/2015 -2- J U D G M E N T S.V.Bhatti, J. Heard learned Standing Counsel Mr. Christopher Abraham and learned Senior Counsel Mr. Joseph Markos for parties. 2. The Commissioner of Income Tax/Revenue is the appellant. M/s.Apollo Tyres Ltd., Kochi/Assessee is the respondent. The subject appeal is at the instance of Revenue from the order of Income Tax Appellate Tribunal (for short ‘the Tribunal') Cochin Bench in IT(TP)A No.02/Coch/2014 dated 21.11.2014. The controversies relate to the Assessment Year 2009-10. 3. The appeal deals with the controversy on availing 50% of depreciation unavailed under Section 32(1)(iia) in the previous year ending on 31.03.2009, whether could be allowed

I.T.A. No.184/2015 -3- in the subsequent year or not. Substantial questions raised read as follows: “1. Whether, on the facts and in the circumstances of the case and on an interpretation of Sec. 32(1)(iia) read with the second proviso the Tribunal is right in law in holding that "the balance 50% of the depreciation has to be allowed in the subsequent year" and is not the above finding against law and perverse? 2. Whether, on the Tribunal is right in law in holding that "the second proviso to section 32(1)(ii) is to mean that 10% should be allowed in the year in which the machinery is acquired and installed and the balance 10% has to be impliedly allowed in the subsequent year" and is not the above interpretation and approach against law and the intention of the legislature?” 4.1 The circumstances leading to the disagreement between he Revenue and the assessee are not in dispute and the fact that the assessee at the first instance availed 50% of additional depreciation allowed under Section32(1)(iia) of the Act. The assessee could avail 50% of allowed depreciation on account of the fact that the equipment for which depreciation

I.T.A. No.184/2015 -4- was claimed was not used for more than 180 days in the previous year 2008-09. Thus, the assessee claimed 10% of permissible 20% depreciation in the previous year 2008-09 and claimed balance 50%, i.e., 10% of 20%, in the Assessment Year 2009-10. The Tribunal held that there is no restriction in the Income Tax Act from availing balance of one-time-incentive in the form of additional sum of depreciation in the subsequent year. 4.2 Learned Senior Counsel appearing for the assessee refers to and relies on the judgments in Commissioner of Income- tax, Madurai v. T P Textiles (P) Ltd.1 and Commissioner of Income-tax, Bangalore v. Rittal India (P) Ltd2 for sustaining the view taken by the Tribunal. It is also argued that the clarificatory amendment made to Section 32(1)(ii) with effect from 01.10.2016 also supports the deduction claimed by the assessee. The 1 (2017) 79 taxmann.com 411 (Madras) 2 (2016) 66 taxmann.com 4 (Karnataka)

I.T.A. No.184/2015 -5- amendment, no doubt, was introduced with effect from 01.10.2016, is a clarificatory amendment. The decisions relied on by the assessee are directly on the point and we are in full agreement with the view taken by the Madras and Karnataka High Courts. The proposition sated in the reported judgment applies in all fours. By following the reasons and principles laid down in T P Textiles (P) Ltd. and Rittal India (P) Ltd (supra), substantial questions are answered against the Revenue and in favour of the assessee. No order as to costs. Sd/- S.V.BHATTI JUDGE Sd/- BECHU KURIAN THOMAS JUDGE jjj

I.T.A. No.184/2015 -6- APPENDIX OF ITA 184/2015 PETITIONER ANNEXURE ANNEXURE A COPY OF THE ASSESSMENT ORDER DATED 28/03/2013 PASSED BY THE ASSESSING OFFICER FOR AY 2009-10. ANNEXURE B COPY OF THE DRP ORDER NO.124/DIT/IT/2012-13 DATED 10/12/2013 FOR ASSESSMENT YEAR 2009-10. ANNEXURE C COPY OF THE ITAT, COCHIN BENCH ORDER NO.I.T. (TP) A NO.02/COCH/2014 DATED 21/11/2014 FOR ASSESSMENT YEAR 2009-10.