Tribunal upholds CIT (A) decisions for AY 2012-13. Disallowance under section 14A not applicable. Additional depreciation deletion upheld.

The Tribunal dismissed the revenue's appeal for the assessment year 2012-13, upholding the decisions of the Ld. CIT (A) on both issues. The disallowance under section 14A read with Rule 8D was not applicable as the assessee had sufficient own and interest-free funds. Additionally, the deletion of additional depreciation claimed under section 32(1)(iia) was upheld, citing precedents allowing 50% depreciation in the subsequent year for assets put to use for less than 180 days.

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Issues:
1. Disallowance under section 14A read with Rule 8D of the Income Tax Act, 1961.
2. Additional depreciation claim under section 32(1)(iia) of the Income Tax Act.

Issue 1 - Disallowance under section 14A read with Rule 8D:
The appeal was filed by the revenue against the Commissioner of Income Tax (Appeals) decision to allow the appeal filed by the assessee against the assessment order. The assessee had not made a suo moto disallowance under section 14A read with Rule 8D of the Act. The AO made a disallowance under Rule 8D (2)(ii) & (iii), which the Ld. CIT (A) deleted. The revenue challenged this decision. The Tribunal upheld the decision of the Ld. CIT (A) based on various High Court judgments and ITAT decisions. The Tribunal found that as the assessee had sufficient own and interest-free funds, no disallowance was necessary under section 14A. The Tribunal referred to judgments like CIT vs. HDFC Bank and Cheminvest Ltd. vs. CIT to support its decision.

Issue 2 - Additional depreciation claim under section 32(1)(iia):
The revenue challenged the deletion of additional depreciation claimed by the assessee under section 32(1)(iia) for plants and machinery put to use for less than 180 days in the preceding year. The Ld. CIT (A) had deleted the additional depreciation, which the Tribunal upheld. The Tribunal referred to various decisions of ITAT and the High Court of Karnataka to support its decision. The Tribunal cited the case of CIT vs. Rittal India Pvt. Ltd., where the High Court held that the assessee is entitled to 50% depreciation in the subsequent year if the plant and machinery were put to use for less than 180 days in the previous year. The Tribunal found no infirmity in the Ld. CIT (A)'s order and dismissed the revenue's appeal.

In conclusion, the Tribunal dismissed the revenue's appeal for the assessment year 2012-13, upholding the decisions of the Ld. CIT (A) on both issues. The judgment was pronounced on 31st January 2019.

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