2011 (4) TMI 1336

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the claim of assessee. For the sake of completeness, the said chart is scanned and pasted in the succeeding paragraphs. Taking cue from the above chart, we proceed to adjudicate the grounds raised in all these three appeals as per the discussion in the succeeding paragraphs. ITA No. 965/PN/2009 - Asstt. Year 2003-04 - Assessee's appeal) 2. Ground A of this appeal relates to claim of depreciation on leasehold rights. Revenue authorities are of the opinion that these rights constitute intangible and non depreciable assets and therefore, the depreciation is not allowable u/s. 32 of the Income Tax Act. Ld Counsel for the assessee fairly mentioned that issue of grant of depreciation has been covered against the assessee by the decision of the Tribunal in the assessee's own case for the A.Ys. 1999-2000 and 2001-02 by the Tribunal's order dated 27.11.2007 (ITA Nos. 442/PN/2003 and 454/PN/2005 respectively where the Tribunal relying on the Special Bench decision in the case of Mukund Ltd and Others, 106 ITR 231 (Bom) held that where payments made for acquiring such rights are held to be capital in nature. However, the Ld. Counsel has mentioned that the apex Court in the case of T....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ered into on 30th March 1998 in support their decisions. On this issue, assessee submitted that the said agreement, though signed on 30th March 1998, was given effect in the period subsequent to the said amendment to section 32(1)(ii). In this regrd, the assessee narrated these events as per the table given below : Sr. No. Date Description 1. 30 Mar 1998 Agreement to sale and purchase Baramati Unit between Greaves Ltd. and Appellant [relied upon by the lower authorities] 2. 31 Mar 1998 Accounted the purchase transaction in the books of account 3. 01 April 1998 The Appellant paid stamp duty on account of entering into the aforesaid agreement 4. 01 April 1998 Depreciation on assets acquired from Greaves Limited was claimed from A.Y. 1999-00 onward only. 5.  08 April 1998 First sale Invoice was raised by Appellant from Baramati unit. 6. 25 June 1998 Transfer of dealership network by actual communication to the dealers by Greaves Ltd. 7. Diff dates after1 Apr 98 Payment to Greaves Ltd for purchase of Baramati unit. 8.  4 August 1998 Sale Deed for Purchase of Baramati Unit between Greaves Ltd. and....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f these requirements are satisfied, the liability is not a contingent one. The liability in presenti though it will be discharged at a future date. It does not made any difference, if the future date, the liability shall have to be discharged, is not certain." In the context of leave encashment and the past experiences, the apex court has come to the above conclusions. From the above it is self-explanatory that the incurring of liability should be certain during the year and such liability should be capable of estimation with reasonable certainty. Actuarial valuation constitutes a basis for reasonable estimation in this regard. In the instant cas, the basis for estimation of provision for warranty for this year also is the same as in earlier years. Therefore, we find no reason to disturb the settled position in this matter. D.R. has not brought anything on record to controvert the above settled position. Therefore, we are of the opinion that the assessee must succeed in this regard. 5. Ground D relates to claim of deduction under section 80HHC of the Act on the interest income when the said income was undisputedly treated as 'income from other sources'. This issue is covered ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lowed. 9. In the result, appeal of the assessee is partly allowed. ITA No. 1203/PN/2009 (Revenue's Appeal) 10. The only issue agitated before us by the Revenue relates to granting of additional depreciation on the computers used in the manufacturing process. In this regard, Ld. Counsel relied on the Jharkhand High Court judgment in the case of TRF Ltd. v/s. CIT [2008], 298 ITR 78 and mentioned that the computers are eligible for additional depreciation u/s. 32(1)(iia). On the other hand, Ld. D.R. relied on the orders of the Revenue and we perused the facts of the case and the cited judgment in the case of TRF Ltd. (Supra). The held portion of the said judgment reads as follows : "Held that investment allowance was admissible in respect of the industrial undertaking for the purpose of business of construction, manufacture or production of any article or thing. It was the specific case of the assessee that these computers were installed in the factory premises for the purpose of business of manufacture and production of an article which had not been denied by the Revenue. It had not been disputed that the computers installed by the assessee were used for processing ....