TaxTMI 
TaxTMI 
2017 (5) TMI 1694
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....10% of the additional depreciation. The Assessing Officer has held that the assessee cannot claim the balance 10% of depreciation in the subsequent year as per provisions of section 32(1)(iia) of the Act by following various decision of the Tribunal. 3. On appeal, by following the decision in the case of CIT v. Rittal India Pvt. Ltd. 380 ITR 423, the ld. CIT(A) directed the Assessing Officer to allow the additional depreciation as claimed by the assessee. 4. On being aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has strongly relied on the decision in the case of M.M. Forgings Ltd. v. Addl. CIT 349 ITR 673 (Mad)] and submitted that the Hon'ble Jurisdictional High Court has considered the very same issued of additional depreciation and also interpreted section 32(1) and 32(1)(iia) and held that if the assessee has used the new plant and machinery below 180 days, it is only eligible for 50% of the additional depreciation as provided in the statute and strongly supported the assessment order. 5. On the other hand, the ld. Counsel for the assessee has submitted that the additional depreciation as provided by the Legislature, is a beneficial provision and if t....
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....ia) of the Act, had to be necessarily assessed by applying the second proviso to section 32(1) of the Act. Therefore, when there was statutory stipulation providing for restriction to 50 per cent of the amount allowable under section 32(1)(iia) of the Act, no fault can be found with the conclusion of the Assessing Authority as well as that of the Appellate Authority and the Tribunal in having affirmed the action of the Assessing Authority. We, therefore, do not find any scope to entertain the said question of law." 8. From the above decision of the Hon'ble Jurisdictional High Court, it is clear that when the new asset acquired and put it in use for less than 180 days, as per the provisions of section 32(1)(iia) of the Act, the assessee cannot claim 100% additional depreciation and therefore, restricted 50% of the eligible additional depreciation to the assessee. This case law relied on by the ld. DR has no application to the facts of the present case. If the new asset acquired and installed and put it in use for more than 180 days, the assessee is eligible to claim 20% of additional depreciation. In the present case, the new asset acquired, installed and put it in use for less th....
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....) would be defeated because it provides for 20% deduction which shall be allowed. 10. 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 onetime benefit to encourage industrialization, and provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting additional allowance. We are in full agreement with such observations made by the Tribunal." 9. In view of the above judgement of Hon'ble Karnataka High Court, we are of the considered opinion tha....
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....n, the Hon'ble High Court has observed and held as under: "2. The brief facts of the case are as follows: The respondent/assessee filed its return of income for the assessment years in question. The said returns were processed and were not selected for scrutiny. Subsequently, the Assessing Officer noticed that there was escapement of income and hence reopened the assessments under Section 147 of the Income Tax Act by issuing notice under Section 148 of the Income Tax Act. While completing the re-assessment, the Assessing Officer disallowed the expenses claimed by way of Employee's contribution to PF and ESI holding that the assessee had not paid the employee's contribution of PF and ESI within the due dates specified under the respective Act. Aggrieved by the said order of assessment, the assessee preferred appeals before the Commissioner of Income Tax (Appeals) challenging the reopening as well as the disallowance. The Commissioner of Income Tax (Appeals) sustained the order of the assessment, thereby dismissed the appeals. Aggrieved by the same, the assessee preferred further appeals before the Tribunal. The Tribunal relied upon the decision of the Supreme Court in the....
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....te of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of section 43B as amended by the Finance Act, 2003. The decision of the Hon'ble Delhi High Court has been followed by the co-ordinate bench of the Tribunal in the case of JCIT Vs. M/s. S.M.Apparels (P) Ltd. (supra). The Tribunal has been consistently following the view taken by the Hon'ble Delhi High Court. Accordingly, we hold that the assessee is entitled to claim expenditure on employee's contribution towards ESI and Provident Fund for both the AYs. Accordingly, both the appeals of the assessee are allowed." 6. Respectfully following the above, decision, we direct the Assessing Officer to delete disallowances made under section 43B of the Act for both these assessment years. The grounds of appeal raised by the assessee are allowed." 3. Aggrieved by the said order of the Tribunal, the Revenue is before this Court. 4. Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 5. We find that the Tribunal has rightly relied on the decision of the Supreme Court in the case of CIT V. Alom Extrusions Ltd. rep....
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....strongly supported the order passed by the ld. CIT(A). 17. We have considered rival submissions and perused the materials available on record. During the year under consideration, the assessee has earned dividend income of Rs..2,61,45,738/-[ as appeared in appellate order] from mutual funds and domestic companies and claimed the entire income as exempt under section 10(33) and 10(34) of the Act. In the assessment order, the Assessing Officer has invoked the provisions of Rule 8D and determined the expenditure incurred relatable to the exempt income earned by the assessee. Before the ld. CIT(A), it was the submission of the assessee that no amount of borrowed capital has been utilized for making investments capable of earning exempt income and relied on the decision in the case of CIT v. HDFC Bank Limited 89 CCH 185 (Mum) and in the case of CIT v. Hotel Savera 239 ITR 795 (Mad) and pleaded that there can be no disallowance under Rule 8D(2)(ii) of the IT Rules. With regard to disallowance under Rule 8D(2)(iii), it was the submission of the assessee that investments in subsidiary companies is purely for furtherance of strategic business interests and should not be taken into conside....
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....i Tribunal in the case of EIH Associated Hotels Limited (supra) and exclude investments made in the sister and group companies from the purview of disallowance under section 14A of the Act. The ld. Chennai Tribunal in this case has held that such investments are not made for the purpose of earning dividend income, but for strategic business purposes. The AO is further directed, in view of the decision of ld. Chennai Tribunal in the case of M/s. Computer Age Management Services (P) Limited (supra) to recompute disallowance under section Rule 8D(2)(iii) by taking only the investments which have given rise to the income during the year which does not form the part of total income. Subject to the above directions, appellant's claim of section 14A disallowance is partly allowed." From the appellate order, on verification of the financial details, the ld. CIT(A) has observed that the loans have been sanctioned for specific business purposes and the total term loans taken from the bank was amounted to Rs..30,24,44,747/-, whereas, the total interest on long term borrowings is at Rs..357.42 lakhs. He has further noticed that the capital, profit, reserve surplus, current and deposits we....