Additional depreciation eligibility turns on post-cut-off acquisition and installation, defeating revision where machinery arrived later.

Additional depreciation under section 32(1)(iia) was allowed because the new machinery was acquired and installed after the statutory cut-off date of 31 March 2005. Although the invoice was on CIF terms and an earlier contractual date was relied on, the bill of entry and octroi documents showed entry into India on 11 April 2005, and installation could not have occurred before physical arrival. On that record, the allowance was not erroneous or prejudicial to the Revenue, so revision under section 263 was not sustainable and was quashed.

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Issues: Whether the revisionary order under section 263 was valid where the Assessing Officer had allowed additional depreciation under section 32(1)(iia), and whether the machinery was acquired and installed after the statutory cut-off date so as to qualify for the deduction.

Analysis: Section 32(1)(iia) grants additional depreciation only where new machinery or plant is both acquired and installed after 31 March 2005. The machinery was invoiced on CIF terms, but the bill of entry and octroi documents showed entry into India on 11 April 2005. Even if property in the goods had passed earlier on the basis of contractual documents, installation could not have taken place before physical arrival of the machinery. The conditions of the provision therefore stood satisfied. Since the allowance was correctly made, the assessment could not be characterised as erroneous and prejudicial to the interests of the Revenue.

Conclusion: The revisionary order under section 263 was quashed and the assessee was held entitled to additional depreciation under section 32(1)(iia).

Final Conclusion: The assessee succeeded, and the Commissioner's revision was set aside on the finding that the statutory conditions for additional depreciation were fulfilled.

Ratio Decidendi: For claiming additional depreciation under section 32(1)(iia), both acquisition and installation of the new machinery must occur after the specified cut-off date; where the record shows post-cut-off entry and installation, revision under section 263 cannot be sustained merely on an earlier invoice or payment date.

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