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Partial success for assessee in ITAT appeal for higher depreciation rate on textile machinery. Interest recalculated. Brought forward depreciation relief granted. The appeals by the assessee against CIT(A) orders for A.Y. 2004-2005 and A.Y. 2006-2007 were partially allowed by ITAT. The higher rate of depreciation ...
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Partial success for assessee in ITAT appeal for higher depreciation rate on textile machinery. Interest recalculated. Brought forward depreciation relief granted.
The appeals by the assessee against CIT(A) orders for A.Y. 2004-2005 and A.Y. 2006-2007 were partially allowed by ITAT. The higher rate of depreciation claimed on machinery used in the textile industry was allowed at 50% for machinery used in the weaving sector. The charging of interest under Section 234B was directed to be re-computed after final income determination. Additionally, relief for brought forward depreciation was granted based on detailed discussion and precedent. The order was pronounced on 23rd April 2010.
Issues involved: Two appeals by the assessee against CIT(A) orders for A.Y. 2004-2005 and A.Y. 2006-2007 u/s 143(3) ITA.
Depreciation on machinery in weaving sector: The assessee claimed higher rate of depreciation on machinery used in textile industry under TUFS. AO denied claim stating the assessee is not in weaving business. ITAT referred to relevant rules allowing 50% depreciation for machinery used in weaving sector. Decision of ITAT in similar cases supported assessee's claim. AO's argument refuted based on activities from twisting yarn to weaving grey cloth. ITAT held in favor of assessee, allowing 50% depreciation.
Interest under Section 234B: Assessee challenged charging of interest under Section 234B. ITAT directed AO to re-compute interest after final income determination.
Relief of brought forward depreciation: Assessee's appeal for relief of brought forward depreciation was allowed based on detailed discussion and previous decision.
Conclusion: Assessee's appeals partly allowed, with directions to re-compute interest and allowance of depreciation. Grounds not pressed were treated accordingly. The order was pronounced on 23rd April, 2010.
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