Appeal allows additional depreciation claim for late-installed machinery despite initial disallowance.

The appeal challenged the disallowance of additional depreciation claimed for machinery installed in the previous year. The authorities disallowed the claim, stating it should be restricted to the year of installation. The appellant argued that the balance of additional depreciation was claimed in the current year due to late installation. The Tribunal, following a liberal interpretation of the provision, allowed the claim for additional depreciation, setting aside the disallowance made by the lower authorities.

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Issues:
1. Disallowance of additional depreciation under section 32(1)(iia) in the subsequent year of machinery installation.

Analysis:

Issue 1: Disallowance of additional depreciation under section 32(1)(iia) in the subsequent year of machinery installation:
- The appellant challenged the disallowance of additional depreciation claimed for machinery installed in the previous year.
- The AO and CIT(A) disallowed the claim, stating that the benefit should be restricted to the year of installation.
- The appellant argued that since the machinery was installed late in the previous year, the balance of additional depreciation was claimed in the current year.
- The High Court's decision in a similar case emphasized a liberal interpretation of the provision as a beneficial legislation to encourage industrialization.
- The learned DR contended that there was no provision to extend the benefit to subsequent years.
- The Tribunal noted that the assessee claimed the balance 10% additional depreciation in the current year for the machinery installed in the previous year.
- Referring to the High Court's decision, the Tribunal held in favor of the assessee, allowing the claim for additional depreciation.
- The appeal was allowed, setting aside the disallowance made by the authorities below.

This detailed analysis covers the disallowance of additional depreciation under section 32(1)(iia) in the subsequent year of machinery installation, highlighting the arguments presented, the authorities' decisions, and the final judgment based on legal interpretations and precedents.

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