Appeal delay condoned, assessee wins additional depreciation benefit

The delay in filing the appeal was condoned by the tribunal, allowing the appeal to be heard on merits. The tribunal ruled in favor of the assessee, directing the Assessing Officer to grant the benefit of additional depreciation not claimed in the earlier assessment year based on conflicting decisions by different benches regarding the interpretation of provisions related to additional depreciation under section 32(iia).

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Issues involved:
Delay in filing appeal, Disallowance of additional depreciation, Interpretation of provisions regarding additional depreciation u/s.32(iia)

Delay in filing appeal:
The appeal was filed with a delay of five days, and the assessee submitted an affidavit citing reasons for the delay. The tribunal examined the contents of the affidavit and found the explanation for the delay satisfactory. Consequently, the delay was condoned, and the appeal was admitted to be heard on merits.

Disallowance of additional depreciation:
The assessee, engaged in manufacturing, filed its return of income for AY 2007-08 declaring total income. The Assessing Officer disallowed additional depreciation u/s.14A in scrutiny assessment and revised the order u/s.154 to disallow additional depreciation of 10% on the ground that it is allowable only in the year when the new Plant & Machinery is first put to use. The CIT(Appeals) dismissed the appeal following a previous tribunal decision. The assessee contended that the remaining 50% of the depreciation should be claimed in the current AY based on tribunal decisions allowing such claims in similar cases.

Interpretation of provisions regarding additional depreciation u/s.32(iia):
The tribunal considered conflicting decisions by different benches regarding the allowance of additional depreciation on new Plant & Machinery u/s.32(iia). The Delhi Bench allowed the claim for 50% of additional depreciation in cases where the asset was put to use for less than 180 days in the year of installation, with the balance claimed in the next year. In contrast, the Chennai Bench took a contrary view. Citing the principle that when two views are available, the one favoring the assessee should be taken, the tribunal allowed the appeal, directing the Assessing Officer to grant the benefit of additional depreciation to the extent not claimed in the earlier AY.

This judgment highlights the importance of timely filing appeals, the interpretation of provisions related to additional depreciation, and the significance of judicial decisions in resolving conflicting views on tax matters.

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