TaxTMI 
TaxTMI 
2018 (9) TMI 1868
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.... No. 2 states that the ld. CIT (A) has erred in confirming disallowance of Rs. 1,11,25,307 on account of additional depreciation claimed under section 32 (1) (iia) of the Act. 4. The assessee has claimed additional depreciation of Rs. 1,11,25,307 on power plant and electric installations. The AO was of the view that plants and machinery are covered under section 32(1)(i) of the Act on which normal depreciation is allowable, hence, additional depreciation is not allowable. The additional depreciation @20% is allowable under section 32 (1) (iia) in respect of plants and machinery acquired and installed after 31.03.2005 and used in manufacturing or production of articles or things. It was contended that that the assessee company was formed ....
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....ness of generation or generation and distribution of power" which clearly showed that such benefit was not available before A.Y. 2013-14. In other words, before A.Y. 2013-14 assessee who is engaged in the business of generation of power or generation & distribution of power were not eligible for additional depreciation. It was further observed that provision of section 32 (1)(iia) talks about that the assessee engaged in the business of manufacturing and production of an article or thing obviously power generation is not manufacturing and production of an article or thing. Moreover, when specific provision has been made in section 32(1)(i) then there is no need to adopt indirect legislation i.e. Rule 5 (1A) of Income-Tax Rules, 1962. ....
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....ciation to an undertaking engaged in generation or generation & distribution of power at such percentage of the actual cost as prescribed and hereafter referring to the amendment which has been brought in by the Finance Act,2012 wherein the provisions of section 32 (1)(iia) has been amended to provide for additional depreciation to an assessee engaged in business of generation or generation & distribution of powers, the assessee's claim was denied holding that the said amendment is prospective in nature. However, the assessee's case is that as per the second proviso to Rule 5(1)(a) of the IT rules, an undertaking specified in section in 32(1)(i) may instead of claiming depreciation as per Appendix IA (depreciation on actual cost on st....
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....(ii). In other words, over and above the depreciation claimed and allowed u/s 32(1)(ii) of the Act, the assessee shall be eligible for an additional depreciation of 20% of the actual cost of such machinery and plant. It further provides that a machinery of plant should be a new machinery or plant (other than ships and aircraft) which has been acquired and installed after the 31st day of March, 2005. It further provides that the additional depreciation in new machinery or plant shall be allowed in the hands of the assessee who is engaged in the business of manufacture or production of any article or thing or in the business of generation or generation & distribution of power. In the instant case, it is not in dispute that new machinery or pl....
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....onal depreciation u/s 32(1)(iia) on same. 12. It is now a settled position as held by the Hon'ble Supreme Court and the various Co-ordinate Benches of the Tribunal that the process of generation of electricity is akin to manufacture of an article or thing, the assessee in the instant case satisfy the requirement that it is engaged in the business of manufacture or production of an article or thing. Now coming to the amendment which has been brought-in by the Finance Act 2012 w.e.f. A.Y. 2013-14whereby the assessee engaged in the business of generation or generation & distribution of power have specifically been included and held eligible for claim of additional depreciation. In our view, the said amendment cannot be held to disentitle th....