C.R.I.PUMPS PRIVATE LIMITED,CHENNAI vs. DCIT, COIMBATORE

आदेश / O R D E R

PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER

In this appeal filed by the assessee, its grievance is that additional depreciation of �8,53,07,702/- claimed u/s.32(1)(iia) of the Income Tax Act, 1961 (herein after referred to as ‘the Act’) was not allowed to it.

ITA No. 1049/Mds/2016. :- 2 -:

Facts apropos are that assessee engaged in manufacturing 2. and sale of pumps and motors had claimed additional depreciation of �8,53,07,702/-. As per assessee, additional depreciation was on plant and machinery acquired and installed in preceding years, which was carried forward. Ld. Assessing Officer did not accept the claim.

According to him, such additional depreciation was available only to new plant and machinery acquired during an year and would not be eligible for such depreciation subsequent years. As per ld. Assessing Officer the whole of the actual cost of plant and machinery on which additional depreciation was claimed was allowed as deduction by virtue of Sec.32(1) (ii)(a) of the Act. Ld. Assessing Officer also noted that similar claims for assessment years 2008-09 to 2010-2011 were disallowed and such disallowance was sustained by the ld. Commissioner of Income Tax (Appeals) as well as this Tribunal. He thus disallowed the claim.

The appeal of the assessee before ld. Commissioner of 3.

Income Tax (Appeals) against disallowance of additional depreciation did not meet with any success.

Now before us, ld. Authorised Representative strongly 4. assailing the orders of the lower authorities submitted that additional depreciation was available for every year till the value of the asset

ITA No. 1049/Mds/2016. :- 3 -: became Nil. According to him, Hon’ble Karnataka High Court in the case of CIT and another vs. Rittal India Pvt. Ltd. 380 ITR 423 had held that balance of additional depreciation which could not be claimed in particular assessment year due to use less than 180 days could be allowed in subsequent years.

Per contra, ld. Departmental Representative strongly 5.

supported the orders of the authorities below

We have considered the rival contentions and perused the 6. orders of the authorities below. Argument of the ld. Authorised Representative is that balance of the depreciation remaining due to restriction of additional depreciation claimed by the assessee, to 50% of the eligible amount, in the year in which a new machinery was put in use for using for a period less than 180 days, could be claimed in subsequent year, by virtue of judgment of Hon’ble Karnataka High Court in the case of Rittal India Pvt. Ltd (supra). In our opinion there can be no quarrel on this. However, ld. Assessing Officer had disallowed the claim not for this reason but for a reason that assessee was claiming additional depreciation for every year after installation of plant and machinery. Nevertheless, assessment order nor the order of the ld. Commissioner of Income Tax (Appeals) give the full details of the additional depreciation claimed by the assessee viz whether it

ITA No. 1049/Mds/2016. :- 4 -: relates to plant and machinery installed in the immediate preceding assessment year, which was used for less than 180 days or whether such claim was for plant and machinery installed in earlier years. Needless to say assessee is eligible to claim additional depreciation only to the extent of the balance 50% remaining out of what was allowed in the immediate preceding year, for use less than 180 days. We set aside the order of the lower authorities and remit the issue regarding claim of additional depreciation back to the file of the ld. Assessing Officer for verification of the facts and correct application of law.

In the result, the appeal of the assessee is allowed for 7. statistical purpose. Order pronounced on Wednesday, the 23rd day of November, 2016, at Chennai.