TaxTMI 
TaxTMI 
2016 (5) TMI 541
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....e ground that the A.O has initiated proceedings u/s. 147 of the Act without jurisdiction. Secondly, on merits of the case, the assessee is aggrieved by the order of the ld. CIT(A) by which disallowance of the claim of additional depreciation on plant and machinery has been upheld. 3. At the very outset, the ld. counsel for the assessee stated that he is not pressing the ground relating to the challenge of the re-opening of the assessment. Hence, the same is dismissed as not pressed. 4. Coming to the merits of the case, during the course of the assessment proceedings and on verification of the case records, the A.O found that the assessee had claimed depreciation of Rs. 2,18,50,976/- which was @ 20% u/s. 32(1)(iia) of the Act. On furth....
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....thorities. It is the say of the ld. counsel that since additional depreciation is a benefit conferred upon the assessee by the statute, it deserves liberal construction and the benefits cannot be denied on technical reasons. 9. Per contra, the ld. D.R. strongly supported the findings of the revenue authorities. It is the say of the ld. D.R. that the A.O has rightly denied the claim since the assessee has not fulfilled the mandatory conditions for the claim of additional depreciation. 10. We have heard the rival submissions and carefully perused the orders of the authorities below. In so far as the factual matrix is concerned, there is no dispute. Admittedly, the assessee accepts that the machinery was acquired before 31.03.2005 but the s....
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....ity of production as existing on the last day of any previous year commencing on or after the 31st March, 2002. The proposed amendment will take effect from 1st April, 2003 and will, accordingly, apply in relation to the assessment year 2003- 2004 and subsequent years. 11. A perusal of the aforementioned object clearly shows that the legislature wanted to give a boost to the manufacturing sector. 12. This provision was subsequently amended by the Finance Bill, 2005 and the object for amending the provisions read as under:- "Clause 8 seeks to amend section 32 of the Income-tax Act relating to depreciation. Under the existing provisions contained in clause (iia) of sub-section(1) of the said section, a further sum equa....
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....resent case, as mentioned elsewhere, the assessee has acquired the plant and machineries before 31.03.2005 but the machineries were installed after 31.03.2005. If the revenue authorities' view is accepted then the assessee cannot claim additional depreciation as per earlier provision since the machineries were neither acquired nor installed after 31.03.2002. At the same time, the assessee cannot claim the additional depreciation under the new provisions as machineries were acquired before 31.03.2005 but installed after 31.03.2005. Such interpretation would lead to a precarious situation and put the assessee in a vulnerable situation wherein even after making investments in new plant and machineries, the assessee is deprived of additional de....
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....ts schedule annexed to the balance sheet. These machines have been only transferred to the machines account during the year under reference. No depreciation was claimed by the assessee on these machines and depreciation was only claimed on the machines which were shown as machines of the assessee in the fixed assets schedule. Two things would, therefore, be clear; firstly, these machines were new and they were under installation and the installation was completed during the year under reference ; and secondly, no depreciation was ever claimed by the assessee prior to this assessment year on these machines. This finding of the Tribunal has not been challenged. The Tribunal also found that the machines, although acquired earlier, could not be....
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....on directed towards encouraging industrialization by permitting an assessee setting up a new undertaking to claim the benefit of not paying tax to the extent of such per cent in a year on the capital employed. But the legislature took care to restrict such benefit only to those undertakings which were new in form and substance by providing that the undertaking should not be "formed" in any manner provided in cl. (i) of sub-s. 15C. Each of these requirements namely, formation of the undertaking by splitting up or reconstruction of an existing business or transfer to the undertaking of building, raw material or plant used in any previous business results in denial of the benefit contemplated under sub-s. (1). Since a provision intended for pr....