TaxTMI 
TaxTMI 
2019 (1) TMI 102
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....es of the case, the Ld. CIT(A) has erred in allowing the claim of balance additional depreciation amounting to Rs. 6,36,83,752/- on the assets which were put to use in earlier financial year. 4. That the appellant craves for leave to add, delete or modify any of the grounds of appeal before or at the time of hearing." 3. Ground No. 1 is against the order of the Ld. CIT(A) deleting the upward adjustment of Rs. 1,28,07,543/- ignoring provisions of section 92CA(3) of the Act. At the outset itself, it has been brought to our notice that similar issue arose in the assessee's own case for the A.Y. 2011-12 and 2012-13 wherein the assessee had charged guarantee commission '@ 0.38% of the outstanding guaranteed amount. However TPO/AO assessed corporate fee @ 3% in place of 0.38%. Aggrieved the assessee preferred an appeal before the Ld. CIT(A) who was pleased to delete the ALP adjustment on corporate guarantee fee. Against the action of the Ld. CIT(A), the Revenue has preferred appeals before this Tribunal. And the Tribunal was pleased to partly allow the appeal of the Revenue by holding that guarantee commission be benchmarked by taking the rate of 1% of the outstanding guarant....
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....ecision of the Jurisdictional High Court in the case of CIT vs Model Mfg. Co. reported in 175 ITR 374 (Cal) and in the case of CIT vs Russel Properties Pvt. Ltd. 137 ITR 473 (Cal). We note that since the assessee's case on this issue have been consistently upheld by the CIT(A) which in turn has been upheld by this Tribunal and which decision has been upheld by the Hon'ble Jurisdictional High Court (supra), therefore, we confirm the order of the Ld. CIT(A) allowing the treatment of service charges of Rs. 2,29,16,880/- as business income instead of income from house property. Therefore, this ground of appeal of the revenue is dismissed. 7. Ground No. 3 of the revenue is against the action of the Ld. CIT(A) in allowing the claim of balance additional depreciation amounting to Rs. 6,36,83,752/- on the assets which were put to use in the earlier financial year. 8. The brief facts of the case is that the AO noted that the assessee has claimed Rs. 6,36,83,752/- on account of balance additional depreciation @ 10% on the assets which were purchased and put to use on the latter half of A.Y. 2012-13. The AO noted that the issue relates to the allowability of balance additional depreciat....
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....423 has adjudicated similar issue wherein Hon'ble High Court held as under: "This appeal has been filed by the Revenue challenging the order of the Tribunal whereby full benefit of Section 32(1)(iia) of the Income Tax Act, 1961 (for short 'Act') has been given to the assessee. 2. The undisputed facts of this case are that the respondent-assessee was an existing industrial undertaking, when it had acquired and installed new plant and machinery in the financial year 2006-07 and claimed 50% of additional 20% depreciation (i.e. 10% additional depreciation) under Section 32(1)(iia) of the Act in the corresponding assessment year 2007-08. This was so claimed because admittedly the new machinery was acquired after 01.10.2006 and before 31.03.2007, meaning thereby that it was put to use for the purpose of business for a period of less than 180 days. There is also no dispute with regard to the fact that under Section 32(1)(iia), read with second proviso to 32(1)(ii) of the Act, for the assessment year 2007-08, the respondent- assessee could have been, and was granted benefit of 50% of the 20% of the amount of depreciation allowable under sub-section (ii) of Section....
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....e actual cost thereof to the assessee as may be prescribed ; (ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed : Provided . . . . . . . . . . . . . . (a) . . . . . . . . . . . . (b) . . . . . . . . . . . . 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) 1 or clause (iia), as the case may be: Provided also. . . . . . . . . . . . . Provided also. . . . . . . . . . . . . Provided also. . . . . . . . . . . . . Provided also. . . . . . . . . . . . . Explanation 1. . . . . . . . . . . . . Explanation 2. . . . . . . . . . . . . Explanation 3. . . . . . . . . . . . . ....
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....0 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. 10. It has been consistently held by this Court, as well as the Apex Court, that beneficial legislation, as in the present case, should be given liberal interpretation so as to benefit the assessee. In this case, the intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to only half of the same being granted in one assessment year, if certain condition was not fulfilled. But, that, in our considered view, would not restrain the assessee from claiming the balance of the benefit in the subsequent assessment year. The Tribunal, in our view, has rightly held, that additional depreciation allowed under Section 32(1)(iia) of the Act is a one time benefit to encourage industrialization, and the provisions related to it have to be construed reasonably, liberally and purposively, to make the provision m....