TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 64
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the IT Act, 1961?" 3. The issue pertains to Assessment Year 2007-08. 4. Brief facts are as under: (i) The assessee firm filed E return of income for A.Y. 200708 on 7.11.2007. The assessee declared total income at Rs. Nil as per the normal provisions of the Income Tax Act, 1961 (for short "the Act,") and Rs. 21,86,10,387/under Section 115JB of the Act. Subsequently, the case was selected for scrutiny and order under Section 143(3) of the Act, was passed by the AO vide order dated 21.12.2009 computing total loss of Rs. 29,83,16,673/under the normal provision and total income under Section 115JB of the Act. Subsequently, Commissioner (Appeals) passed order under Section 263 of the Act, on 17.01.2012 on the issue of additional depreciation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut of clause (iia) of sub-section 1 of Section 32 of the Act. Clause (ii) of sub-section 1 of Section 32 of the Act recognizes the depreciation on block of assets. Clause (iia) grants additional depreciation in case of acquisition and installation of new machinery or plant by an Assessee after 31st March, 2005, the Assessee being engaged in business of manufacture or production of an article or things. 6. We may also notice that the second proviso to clause (ii) of sub-section 1 of Section 32 of the Act, would restrict Assessee's claim of depreciation to 50% in case, the assets are acquired by the Assessee during the previous year and put to use for the purposes of business or profession for a period less than 180 days in the said prev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....where restricts that the balance 10 per cent would not be allowed to be claimed by the assessee in the next assessment year. The language used in clause (iia) of the said section clearly provides that "a further sum equal to 20 per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii)". The word "shall" used in the said clause is very significant. The benefit which is to be granted is 20 per cent additional depreciation. By virtue of the proviso referred to above, only 10 per cent can be claimed in one year, if plant and machinery is put to use for less than 180 days in the said financial year. This would necessarily mean that the balance 10 per cent additional deduction can be availed of in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ended the statutory provisions by adding the third proviso to clause (ii) of sub-section 1 of Section 32 of the Act, which reads as under: " Provided also that where an asset referred to in clause (iia) or the first proviso to clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business for a period of less than one hundred and eighty days in that previous year, and the deduction under this sub-section in respect of such asset is restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (iia) for that previous year, then, the deduction for the balance fifty per cent of the amount calculated at the percentage prescribe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he provisions in Finance Bill, 2015" whereby, the aforementioned amendment was brought about. 11.1: The relevant part of the memorandum is extracted hereafter: " .... To remove the discrimination in the matter of allowing additional depreciation on plant or machinery used for less than 180 days and used for 180 days or more, it is proposed to provide that the balance 50 per cent of the additional depreciation on new plant or machinery acquired and used for less than 180 days which has not been allowed in the year of acquisition and installation of such plant or machinery, shall be allowed in the immediately succeeding previous year. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the asses....