TaxTMI 
TaxTMI 
2015 (5) TMI 647
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.... I. T. A. No. 560/Kol/2010 for the assessment year 2006-07. The only issue in this appeal of the assessee is against the order of Commissioner of Income-tax (Appeals) denying the claim for additional depreciation. For this, the assessee has raised following three grounds of appeal : "1(a) That on the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in denying the appellant's claim for additional depreciation of Rs. 78,03,220 in the subject assessment year (i.e., assessment year 2006-07). 1(b) That on the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in denying the appellant's claim for additional depreciation of Rs. 78,03,220 in the subject assessment year (i.e., assessment year 2006-07), being half of aggre gate additional depreciation entitled to the appellant on the ground that carry forward of additional depreciation is not permissible as per the provisions of the Act. 1(c) Without prejudice to the above grounds, on the basis of the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in disregarding that the appellant is in the business of ....
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....assessee and against the Revenue by the decision of the co-ordinate Bench of the Income-tax Appellate Tribunal Kolkata "A" Bench in the case of Birla Corporation Ltd. v. Deputy CIT in I. T. A. No. 683/Kol/2011 for the assessment year 2007-08 dated December 8, 2014 wherein it is held as under : "15. We have heard rival submissions and gone through facts and circumstances of the case. The facts are admitted and there is no dispute on the facts. Only issue for adjudication is whether the assessee is entitled for the balance 50 per cent. additional depreciation in view of section 32(1)(iia) of the Act in the next assessment year for remaining unutilised additional depreciation. We have gone through the relevant provisions of the second proviso to section 32(1)(ii) and 32(1)(iia) of the Act. In the present case before us, the assessee has purchased and installed new plant and machinery for its manufacturing unit and put to use for a period of less than, i.e., 180 days, during the financial year 2005-06 relevant to the assessment year 2006-07 and claimed 50 per cent. additional depreciation under ....
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....ting an implied meaning to the second proviso to section 32(1)(ii) of the Act. Since the second proviso to section 32(1)(ii) does not expressly prohibit the allowance of the balance 50 per cent. depreciation in the subsequent year, the second proviso to section 32(1)(ii) shall not be interpreted to mean that it impliedly restrict the additional depreciation to be allowed in the subsequent assessment year. We are of the view that the assessee now is entitled for 50 per cent. additional depreciation, because in the year in which the machinery was first put to use the assessee claimed only 50 per cent. of additional depreciation for the reason that the same was put to use for less than 180 days, in this assessment year for the balance of depreciation. 16. Before us, learned counsel for the assessee relied on the decision of the co-ordinate Bench of the Income-tax Appellate Tribunal of Cochin in the case of Apollo Tyres Ltd. v. Asst. CIT in I. T. A. No. 616/ Coch/2011 for the assessment year 2007-08 dated December 20, 2013 (unreported), wherein the Bench has decided the issue as under : &....
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.... amount calculated at the prescribed rate. Therefore, if the machinery is put to use in any particular year, the assessee is entitled for 50 per cent. of the prescribed rate of additional depreciation. The Income-tax Act is silent about the allowance of the balance 10 per cent. additional depreciation in the subsequent year. Taking advantage of this position, the assessee now claims that the year in which the machinery was put to use the assessee is entitled for 50 per cent. additional depreciation since the machinery was put to use for less than 180 days and the balance 50 per cent. shall be allowed in the next year since the eligibility of the assessee for claiming 20 per cent. of the additional depreciation cannot be denied by invoking the second proviso to section 32(1)(ii) of the Act. 17. Learned senior counsel also relied on the decision of the Delhi Bench of this Tribunal in the case of Deputy CIT v. Cosmo Films Ltd. [2012] 13 ITR (Trib) 340 (Delhi) and in the case of Asst. CIT v. SIL Investment Ltd. [2012] 148 TTJ (Delhi) 213. This issue was considered by the Delhi Bench of this Tribunal in the ....
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....ear on account of period of usages. Such restrictions cannot divest the statutory right. Law does not prohibit that balance 50 per cent. will not be allowed in succeeding year. The extra depreciation allowable under section 32(1)(iia) is an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50 per cent. on account of usage. The so earned incentive must be made available in the subsequent year. The overall deduction of depreciation under section 32 shall definitely not exceed the total cost of machinery and plant. In view of this matter, we set aside the orders of the authorities below and direct to extend the benefit. We allow ground No. 2 of the assessee's appeal. Since we have decided ground No. 2 in favour of assessee, there is no need to decide the alternate claim raised in ground No. 3. The same is dismissed.' 18. In view of the above discussion and considering the orders of the co-ordinate Benches, cited supra, we are of the considered view that the assessee is entitled for additional depreciation under section ....
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.... year in that eventuality the Assessing Officer cannot examine the question of allowability again and decide to withdraw the relief already granted, without disturbing the deduction granted in the initial year. 8. Learned counsel for the assessee relied on the decision of the hon'ble Gujarat High Court in the case of Saurashtra Cement and Chemical Industries Ltd. v. CIT [1980] 123 ITR 669 (Guj), wherein the ratio laid down was as under (page 674) : 'This takes us to the questions referred to us in Income-tax Reference No. 239 of 1975 at the instance of the Revenue. We do not find any justifying reasons to interfere with the order of the Tribunal so far as both these questions are concerned. The Tribunal was perfectly justified in taking the view that if the relief of tax holiday was granted to the assessee-company for the assessment year 1968-69, the assessee was entitled to continuance of that relief for the subsequent four years and the Income-tax Officer would not be justified in refusing to continue the all....
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....ef under section 80J in the initial year can successfully claim the relief, if the prescribed conditions are satisfied in the subsequent years. We do not think that this decision of this court in Satellite Engineering Ltd.'s case [1978] 113 ITR 208 (Guj) can be of any assistance to the cause of the Revenue, because the question with which this court was concerned in that case was altogether a different one in the context in which the Division Bench was speaking. It should be understood that this is subject to the right of the Income-tax Officer to adjust the relief by fixing the quantum having regard to the respective capital employed in the new undertaking in the year with which he is concerned. In that view of the matter, therefore, the Tribunal was perfectly justified in taking the view as it did and we answer question No. 1, in the affirmative, that is, against the Revenue and in favour of the assessee.' 11. Learned counsel for the assessee also relied on the decision of the hon'ble Delhi High Court in the case of CIT v. Delhi Press Patra Prakashan Ltd. (No. 2) [2013] 355 ITR 14 (Delhi) wherein it h....
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....ctly speaking res judicata does not apply to Income-tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter-and, if there was not change, it was in support of the assessee-we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of Income-tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exempt....
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....; It is a matter of record that the appeal filed by the assessee for the assessment year 1973-74 was allowed by the Income-tax Appellate Tribunal. The effect thereof was that the assessee was granted the requisite deduction under section 80J of the Act for the assessment year 1973-74. The Department has sought reference under section 256(1) of the Act which reference application was also rejected by the Tribunal. Likewise, for the assessment years 1974-75 and 1975-76, the claims of the assessee were allowed. The assessee, once given the deduction under section 80J of the Act is entitled to such a deduction for a period of five years. If the assessee has been allowed the benefit of section 80J in the last three preceding years, there is no reason to deny the same for the instant assessment year. We, therefore, answer this issue also in favour of the assessee and against the Revenue." In the present case, the claim of the assessee under section 80-I of the Act was examined and allowed by the Assessing Officer for three years preceding the assessment year 1991-92. It is relevant to ....
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....igible for deduction in the initial assessment year, the same cannot be denied in the subsequent assessment years on the ground of ineligibility since the set of facts which enable an assessee to claim to be eligible for deduction under section 80-I of the Act occur in the previous year relevant to the initial assessment year and have to be examined in the initial assessment year. In such cases, where the facts on the basis of which the deductions are claimed are subject-matter of an earlier assessment year and do not arise in the current assessment year, it would not be possible for an Assessing Officer to take a different view in the current assessment year without altering or reopening the assessment proceedings in which the eligibility to claim the deduction has been established. In cases where deduction is granted under section 80-I of the Act, the applicability of the section is determined in the year in which the new industrial undertaking is established. The qualification as to whether any industrial undertaking fulfils the condition as specified under section 80-I of the Act has to be determined in the yea....
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....using to continue the relief of tax holiday granted to the assessee- company for the assessment year 1968-69, in the assessment year under reference, that is, 1969-70, without disturbing the relief granted for the initial year. It should be stated that there is no provision in the scheme of section 80J similar to the one which we find in the case of development rebate which could be withdrawn in subsequent years for breach of certain conditions. No doubt, the relief of tax holiday under section 80J can be withheld or discontinued provided the relief granted in the initial year of assessment is disturbed or changed on valid grounds. But without disturbing the relief granted in the initial year, the Income-tax Officer cannot examine the question again and decide to withhold or withdraw the relief which has been already once granted." The Division Bench of the Bombay High Court in the case of CIT v. Paul Brothers [1995] 216 ITR 548 (Bombay) has also adopted the view expressed by the Gujarat High Court in the case of Saurashtra Cement and Chemical Industries Ltd. [1980] 123 ITR 669 (Guj)&#....
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....shan Ltd. (No. 2) [2013] 355 ITR 14 (Delhi) has considered this issue by following the decision of hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC) and of the hon'ble Bombay High Court in the case of CIT v. Paul Brothers [1995] 216 ITR 548 (Bombay) and also Saurashtra Cement and Chemical Industries Ltd. v. CIT [1980] 123 ITR 669 (Guj). Similar are the facts in the case of sister concerns of the assessee i.e., Selvel Transit Advertising Pvt. Ltd. In term of the above, we confirm the order of the Commissioner of Income-tax (Appeals) on this issue and dismiss this common issue of the Revenue's appeals." We find that the assessee has claimed additional depreciation under section 32(1)(iia) of the Act in immediately preceding assessment year 2005-06 and claim was allowed by the Assessing Officer. Once the conditions regarding claim of deduction of depreciation are examined by the Assessing Officer in the very first year, subsequently he cannot go back and say that the additional depreciation is not allowed on business of generation or generation and distribution of power whereas the assessee is in the business of manufacturing of polyes....
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....in the appeal of the Revenue on this issue. Accordingly, we decide this issue against the Revenue. The order of the Commissioner of Income-tax (Appeals) is upheld on this issue.' It is also brought to our notice that the said decision of Hi Tech Arai Ltd. was taken on appeal by the Revenue to this court and this court by order September 1, 2009, in T. C. Appeals Nos. 670 and 671 of 2009 CIT v. Hi Tech Arai Ltd. [2010] 321 ITR 477 (Mad), dismissed the appeal filed by the Revenue, in which also, a question of law identical to the one, which is formulated in this case, has been formulated and put in issue before the court and the Division Bench held as follows (page 479) : "5. In the case on hand, the assessee is stated to have set up two wind mills in addition to the already existing four wind mills and thereby increased its power generation capacity by above 50 per cent. It is true that the assessee is a company engaged in the business of manufacture of oil seeds, moulded rubber parts, reed v....
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....Assessing Officer has allowed excess additional depreciation under section 32(1)(iia) of the Act. For this the assessee has raised the following grounds : "1. The impugned order issued by the learned Commissioner of Income-tax is bad in law and void ab initio. 2(a) That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax erred in initiating the revision proceedings under section 263 of the Act even though the conditions governing initiation of proceedings under section 263 of the Act are not satisfied in case of the appellant. 2(b) That on the facts and circumstances of the case, the learned Commissioner of Income-tax erred in holding that the order passed by the Assessing Officer is erroneous. 2(c) That on the facts and circumstances of the case, the learned Commissioner of Income-tax failed to appreciate that where two opposite views were equally possible an....
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....rit is to promote exports, increase in earning in foreign convertible exchange, promote industrialisation, infrastructure development etc., should be liberally constructed. 8. That on the fact and circumstances of the case, the learned Commissioner of Income-tax failed to issue a speaking order distinguishing the reasons provided by the appellant in favour of carry forward of unclaimed additional depreciation of previous year in the subsequent assessment year. 9(a) That on the facts and circumstances of the case, the learned Commissioner of Income-tax has failed to appreciate that the balance additional depreciation at 7.5 per cent. had already vested in the hands of the Appellant in the year in which the assets had been purchased i.e., assessment year 2005-06. 9(b) That on the facts and circumstances of the case, the learned Commissioner of Income-tax also failed to place reliance on section 6 of the General Clauses Act, 1897 in the above matter. 10. Without prejudice to the above, the appellant prays that in case carry....