TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1082
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....peals) erred in confirming disallowance of additional depreciation under Section 32(1)(iia) of the Act of Rs. 1,11,10,266/- made by the Income-tax Officer, on the ground that the assessee has started production in the succeeding year, but assets were purchased in the previous year and the assessee was not engaged in the business of manufacturing profits when new machinery and plant were acquired. 3. Brief facts of the case are as under: The assessee is engaged in the business of manufacturer of RCC pipes, air avive chambers, cable trench & ready mix concrete. During the course of assessment proceedings, the Assessing Officer observed that from the perusal of the tax audit report, he came to the notice that the assessee has claimed deprec....
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....ssessee has acquired plant and machinery between July, 2009 and March, 2011, As such on all the plant and machinery additional depreciation has to be allowed when the plant and machinery are first put to use. 4.04 In the present case, the plant and machinery were put to use with effect from 1st July, 2011. As such, additional depreciation on all the plant and machinery put into use on 1st July, 2011 should be allowed. 4.05 The Income-tax Officer has disallowed additional depreciation of Rs. 1,14,42,964/- [20% on Rs. 5,55,51,329) solely on the ground that the assessee has purchased the aforesaid fixed assets in F.Y.2010-11 and not during the current F.Y. namely 2011-12, therefore on such plant and machinery, additional depreciation sho....
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.... 31.03.2011 and shown as capital work-in-progress were transferred to respective assets during the year ending 31.03.2012. The production started in the previous year 2011-12 and the assessee has shown sale proceeds from operation amounting to Rs. 2.09 crores Therefore, actual production started in previous year 2011-12 and the business of the assessee was carried on during the year. As the assets are owned by the assessee, it is eligible for depreciation @15 per cent of the plant and machinery. The conditions of section 32(1) are satisfied and hence AO is directed to allow depreciation @ 15 per cent on the plant and machinery. 5.1 However, the claim for additional depreciation @ 20 per cent cannot be allowed because as per clause (iia) ....
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....t the ld. Commissioner of Income Tax (Appeals) has not properly understood the issue and retained the disallowance of additional depreciation on the erroneous premise that the assets were purchased in the previous year prior to the current assessment year. He submitted that the ld. Commissioner of Income Tax (Appeals) has himself given a finding that during the previous year preceding the previous year in this assessment, these new machineries were acquired and were capital work-in-progress. The plant started manufacturing from 01.07.2011 relevant to the current assessment year. Hence, the ld. Counsel of the assessee pleaded that the assessee is very much entitled both to the depreciation as well as additional depreciation. 9. Per contra, ....
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....ords "twenty per cent", the words "thirty-five per cent" had been substituted: Provided further that no deduction shall be allowed in respect of- (A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) any office appliances or road transport vehicles; or (D) any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head "Profits and gains of business or profession" of any....