TaxTMI 
TaxTMI 
2018 (12) TMI 517
X X X X Extracts X X X X
X X X X Extracts X X X X
....80 days during the financial year 2009-10 relevant 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.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed: Provided 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 ren....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt and machinery so acquired is put to use for less than 180 days in a financial year. However, if nowhere restricts that the balance 10% 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% 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 in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing previous year. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years." 11.2. A perusal of the extract of the Memorandum 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....disallowance made by the ld. AO in the sum of Rs. 10,26,000/- for the assessment year 2009-10 was deleted by the earlier Ld. CIT(A). The Ld. CIT(A) following the earlier order passed by his predecessor in assessee's own case deleting the disallowance. Aggrieved the revenue is in appeal 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 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m of Rs. 42,000/- as disallowance u/s 14A of the act in the return of income. The ld. AO observed that the assessee has got huge investment as on 01.04.2010 and 31.03.2011 and has huge borrowings on which interest cost was paid. Accordingly, he proceeded to compute the disallowance u/s 14A of the Act 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 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n was called on for hearing today. Upon hearing counsel the court made the following Order Delay condoned. Leave granted. Pending hearing and final disposal of the Civil appeal, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand 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 meri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l. It has already been held by the Hon'ble Supreme Court in the case of CIT vs. Manmohan Das (Deceased) reported in 59 ITR 699 (SC) that the eligibility of loss brought forward from earlier year for set off is to be examined by the ld. AO only in the year in which such loss is sought to be set off against any income. The relevant portion of the said order of the Hon'ble Apex Court are reproduced hereunder: "The second question presents little difficulty. In making his order of assessment for the year 1950-51, the Income-tax Officer declared that the loss computed in that year could not be carried forward to the next year under section 24(2) of the Income-tax Act, as it was not a business loss. The Income-tax Officer has under section 24(3) to notify to the assessee the amount of loss as computed by him, if it is established in the course of assessment of the total income that the assessee has suffered loss of profits. Section 24(2) confers a statutory right (subject to certain conditions which are not material) upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward the loss as is not set off under sub-section (....