Assessee granted additional depreciation for 2012-13

The Tribunal allowed the appeal, holding that the assessee was entitled to the remaining 10% additional depreciation for the assessment year 2012-13. The lower authorities' orders were set aside, and the Assessing Officer was directed to allow the balance 50% depreciation, i.e., 10% additional depreciation, during the year under consideration.

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Issues Involved:
1. Claim of additional depreciation under section 32(1)(iia) of the Income Tax Act, 1961.

Issue-Wise Detailed Analysis:

1. Claim of Additional Depreciation under Section 32(1)(iia) of the Income Tax Act, 1961:

The primary issue in this appeal revolves around the assessee's claim for additional depreciation under section 32(1)(iia) of the Income Tax Act, 1961. The assessee, engaged in the business of vending beverages and manufacturing soya products and coffee powder, filed its return of income for the assessment year 2012-13. The return declared a total income of Rs. 2,67,29,949/-. The case was selected for scrutiny, and the Assessing Officer (AO) determined the total income at Rs. 2,81,40,019/- and book profit under section 115JB at Rs. 46,10,002/-.

The assessee's appeal to the Commissioner of Income Tax (Appeals) [CIT(A)] was dismissed, prompting the assessee to appeal before the Tribunal. The crux of the appeal was the claim for additional depreciation, which the assessee argued was covered in their favor based on previous Tribunal decisions for assessment years 2009-10 to 2011-12.

Upon hearing both sides and reviewing the materials on record, the Tribunal referred to its earlier decision in the assessee's own case, where it was established that the assessee could claim the remaining 10% additional depreciation in the subsequent year if the machinery was used for less than 180 days in the initial year of acquisition. This position was supported by various Tribunal decisions, including those from the Cochin Bench in Apollo Tyres Ltd. v. ACIT and the Delhi Bench in Cosmo Films Ltd., which held that the balance 50% of additional depreciation could be carried forward to the next year.

The Tribunal also referenced the Karnataka High Court's judgment in Rittal India Pvt. Ltd., which emphasized that beneficial legislation should be interpreted liberally to benefit the assessee. The High Court opined that the proviso to section 32(1)(iia) did not restrict the assessee from claiming the balance of the additional depreciation in the subsequent year.

In conclusion, the Tribunal held that the assessee was entitled to the remaining 10% additional depreciation for the assessment year 2012-13. The orders of the lower authorities were set aside, and the AO was directed to allow the balance 50% depreciation, i.e., 10% additional depreciation, during the year under consideration. The appeal filed by the assessee was allowed.

Order pronounced on the 10th August, 2016 at Chennai.

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