AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 517
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....levant to assessment year 2010-11. 3. Brief facts of this issue is that the assessee installed certain plant and machinery in assessment year 2010-11 and had used the same for less than 180 days during that year. The assessee claimed 50% of additional depreciation eligible during assessment year 2010-11. The remaining 50% portion of Rs. 99,19,911/- was claimed in assessment year 2011-12 was sought to be disallowed by the ld. AO on the ground that unclaimed 50% of additional depreciation pertaining to earlier assessment year cannot be claimed as an allowance in the year under appeal. The Ld. CIT(A) on placing reliance on various decisions of High Courts deleted the said disallowance. Aggrieved the revenue is in appeal before us. 4. We find this issue is already settled in favour of assessee in its own case by the order of this tribunal in I.T.A. No. 508/Kol/2016 for assessment year 2010-11 dated 24.08.2018 wherein it was held as under: 4.2. We have heard rival submissions. We find that this issue is no longer res integra in view of the decision of Hon'ble Madras High Court in the case of CIT vs. Shri T. P. Textiles Pvt. Ltd. reported in 394 ITR 483 (Mad) wherein it was held as u....
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....rovided further that where an asset referred to in clause (i) or clause (ii) or 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 or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) or clause (iia), as the case may be: (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing or generation or generation and distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii)." (Emphasis is ours) 8. Pertinently, the Karnataka High Court, in a decision rendered in the case of CIT V. Rittal India (P.) Ltd., [2016] 66 taxmann.com 4 (Karnataka), has interpreted the aforesaid provision, in partic....
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....e 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% 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% additional depreciation. By virtue of the proviso referred to above, only 10% 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% additional deduction can be availed in the subsequent assessment year, otherwise the very purpose of insertion of Clause (iia) would be defeated because it provides for 20% deduction which shall be allowed....." 9. We are in respectful agreement with the view taken by the Division Bench of the Karnataka High Court, passed in CIT V. Rittal India (P.) Ltd. (No.1) 10. According to us, these are provisions included by the Legislature in the Statute to give a fillip to new industries as also to existing industries, which seek to expand its sway, by investing in and making use of new plan....
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....dum relied upon would show that the legislature recognised the fact that the manner in which the Revenue chose to interpret the provision, as it stood prior to its amendment would lead to discrimination, in respect of plant and machinery, which was used for less than 180 days, as against that, which was used for 180 days or more. 11.3. In our opinion, as indicated above, the amendment is clarificatory in nature and not prospective, as is sought to be contended by the Revenue. The Memorandum cannot be read in the manner, in which, the Revenue has sought to read it, which is, that the amendment brought in would apply only prospectively. 11.4. We are, clearly, of the view that the Memorandum, which is sought to be relied upon by the Revenue, only clarifies as to how the unamended provision had to be read all along. 11.5. In any event, in so far as the Court is concerned, it has to go by the plain language of the unamended provision, and then, come to a conclusion in the matter. As alluded to above, our view, is that, upon a plain reading of the unamended provision, it could not be said that the Assessee could not claim balance depreciation in the A.Y., which follows the A.Y.,....
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....peal before us. 7. At the outset, the ld. AR stated that the appeals preferred by the revenue against the order passed by the Ld. CIT(A) in assessee's own case for the earlier two assessment years i.e. 2009-10 and 2010-11 were dismissed due to low tax effect following the circular of the CBDT. Hence no finding on facts has been recorded as far as this issue is concerned by the Tribunal in any of the earlier years. However he stated that very same sum of amortization of license fee of Rs. 10,26,000/- has been allowed by the revenue commencing from assessment year 1998-99 onwards till assessment year 2008-09 without any dispute. We find that the assessee had only debited in its profit and loss account a sum of Rs. 10,26,000/- representing amortization of license fee over the lease period. It is not in dispute that the assessee has paid a sum of Rs. 2,05,16,859/- as an upfront payment in assessment year 1998-99 as per the agreement, which is sought to be adjusted / set off with the license fee payable by the assessee year on year during the tenure of the lease. Hence effectively the assessee had claimed a sum of Rs. 10,26,000/- as a deduction over the period of the lease, which in ou....
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.... in the computation mechanism provided under Rule 8D(2)(ii) and Rule 8D(2)(iii) and arrived on the disallowance of Rs. 64,06,239/-. The ld. AO after reducing the amount already disallowed by the assessee in the return of income in the sum of Rs. 42,000/-, disallowed a sum of Rs. 63,64,239/- u/s 14A of the Act in the assessment order. This action of the ld AO was upheld by the ld CITA. Aggrieved, the assessee is in appeal before us. 12. We have heard the rival submissions. We find that the ld. AR vehemently argued that the assessee is having sufficient own funds to make investments and hence there cannot be any disallowance under second limb of Rule 8D(2). We find that the assessee is having own funds of Rs. 30622.59 lacs representing share capital, reserves and surplus, borrowed funds of Rs. 8455.57 lacs and whereas the investments made by the assessee were only Rs. 2757.30 lacs as on 31.03.2011. Hence from the bare perusal of the audited statement, it is very much evident the assessee is having sufficient own funds for making investments. Moreover, we find from the investment was that the majority of the investments were made by the assessee company only in debt fund and liquid m....
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....as of date is concerned, it would be open to the department to recover that amount in case Civil Appeal of the department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal , pay tax as if Section 43B(f) is on the statute book but at the same time it would be entitled to make a claim in its returns." Hence from the aforesaid Supreme Court judgement, it could be inferred that the Hon'ble Supreme Court had not stayed the judgement of the Calcutta High Court during Leave proceedings. But the Hon'ble Supreme Court had only passed an interim order on the impugned issue. Hence we deem it fit and appropriate , in the interest of justice and fair play, to remand this issue to the file of the ld AO to pass orders based on the outcome of the main appeal on merits by the Hon'ble Supreme Court as stated supra. Accordingly the ground no. 1 raised by the assessee in this regard is allowed for statistical purposes." Respectfully following the same, ground no. 2 raised by the assessee in its cross objection is allowed for statistical purposes by remanding the issue to the file of ld. AO to pass orders on the outcome of the main appeal on ....