TaxTMI 
TaxTMI 
2014 (9) TMI 998
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....siness of manufacture and sale of piston rings. The assessee filed return declaring total income of .4,63,33,818/-. The Assessing Officer completed the assessment under section 143(3) of the Income Tax Act and assessed income of the assessee at .5,62,86,700/- by disallowing royalty payments of .73,49,009/- and additional depreciation claim of .20,62,530/-. 3. When the assessee carried the matter in appeal before the ld. CIT(Appeals), the ld. CIT(Appeals) with regard to royalty payments of .73,49,009/-, directed the Assessing Officer to treat ¾ as revenue expenditure and the balance of ¼ as capital expenditure. In so far as additional depreciation claim of .20,62,530/- is concerned, the ld. CIT(Appeals) allowed the depreciatio....
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....s/2010 vide order dated 25.02.2011, directed the Assessing Officer to treat ¾ as revenue expenditure and the balance of ¼ as capital expenditure. The relevant findings of the ld. CIT(Appeals) are reproduced as under: "4.1.2 I have considered the assessee's submissions carefully. This issue of treating the royalty payments is a capital expenditure is a recurring issue from the earlier years. The Hon'ble ITAT in the assessee's own case in A.Ys. 1999-2000,2003-04, 2004-05 and 2005-06 (in ITA Nos.1716 to 1719/Mds/2010) has held that 75% of the royalty payment is revenue expenditure and balance 25% was held to be capital expenditure and entitled for depreciation. Since the facts are exactly the same (continuation from the earlier ....
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....eading of section 32(1)(iia) of the Act additional depreciation should be allowed only in the case of new plant and machinery acquired by the assessee and is available only in the year in which it was first put to use. The rate of additional depreciation has been prescribed in the Act and by virtue of putting the asset to use for less than 180 days, the assessee is eligible to get only 50% of the prescribed rates. The Assessing Officer further observed that there is no provision in the Act to carry forward and extend the benefit of additional depreciation to the next year and accordingly disallowed additional depreciation of .20,62,530/-. 10. On appeal, the ld. CIT(Appeals), by following two decisions of the Coordinate Bench of the Tribuna....
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....08 vide order dated 04.04.2013 [where the Judicial Member was party of the Bench], by following the decision of the Coordinate Bench of the Tribunal, has held that additional depreciation is eligible in the year in which assets were put to use and not for any succeeding year. The Hon'ble Jurisdictional High Court in the case of M.M. Forgings Ltd. v. Addl. CIT [2011] 11 Taxnmann.com 367, by considering section 32(1) as well as 32(1)(iia) of the Act, has held as under: "3. The Assessing Authority by applying the second proviso to section 32(1) of the Act, restricted the allowability of the depreciation to 50 per cent of the amount permissible under section 32(1)(iia)of the Act. According to the appellant, when it satisfied all the conditions....