AI Drafter 
TaxTMI 
TaxTMI 
2016 (3) TMI 1385
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....onths. The assessee has claimed the balance 10% during the year under consideration. However, the Assessing Officer disallowed the claim of the assessee on the ground that there is no provision in the Incometax Act, 1961 for allowing the balance 10% of the additional depreciation during the year under consideration. The CIT(A) also confirmed the order of the Assessing Officer. The ld. Counsel placed his reliance on the decision of the Cochin Bench in the case of Apollo Tyres Ltd vs ACIT (2014) 64 SOT 203. 4. On the contrary, Shri Pathlavath Peerya, ld. Departmental Representative submitted that sec. 32(1)(iia) of the Act provides for additional depreciation @ 20%. This sec. does not provide for carry forward of the depreciation in the subsequent year, therefore, the CIT(A) has rightly confirmed the order of the Assessing Officer. 5. We have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the assessee has installed the machinery during the earlier assessment year and the machinery installed is entitled for additional depreciation. However, the Assessing Officer restricted additional depreciation @ 10%....
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....ntage prescribed for an asset under clause (i) or clause (ii) or clause (iia) as the case may be." 11. A bare reading of this section 32(1)(iia) clearly says that in case a new machinery or plant was acquired and installed after 31-03-2005 by an assessee, who is engaged in the business of manufacture or produce of article or thing, then, a sum equal to 20% of the actual cost of the machinery and plant shall be allowed as a deduction. It is not in dispute that the assessee has acquired and installed the machinery after 31-03- 2005. It is also not in dispute that the assessee is engaged in the manufacture of article or thing. Therefore, the assessee is eligible for additional depreciation which is equivalent to 20% of the actual cost of such machinery. The dispute is the year in which the depreciation has to be allowed. The assessee has already claimed 10% of the depreciation in the earlier assessment year since the machinery was used for less than 180 days and claiming the balance 10% in the year under consideration. Section 32(1)(iia) does not say that the year in which the additional depreciation has to be allowed. It simply says that the assessee is eligible for addition....
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.... up of unabsorbed depreciation. This additional benefit in the form of additional allowance u/s 32(1)(iia) is one time benefit to encourage the industrialization and in view of the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188, the provisions related to it have to be construed reasonably, liberally and purposive to make the provision meaningful while granting the additional allowance. This additional benefit is to give impetus to industrialization and the basic intention and purpose of these provisions can be reasonably and liberally held that the assessee deserves to get the benefit in full when there is no restriction in the statute to deny the benefit of balance of 50% when the new machinery and plant were acquired and used for less than 180 days. One time benefit extended to assessee has been earned in the year of acquisition of new machinery and plant. It has been calculated @15% but restricted to 50% only on account of usage of these plant & machinery in the year of acquisition. In section 32(1)(iia), the expression used I "shall be allowed". Thus, the assessee had earned the benefit as soon as he had purchased the new machine....
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....l is of the considered opinion that the assessee is eligible for additional depreciation which was not allowed in the earlier year. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow the balance 10% additional depreciation. 6. The next ground of appeal is with regard to computation of capital gains. 7. Shri R.Vijayaraghavan, ld. Counsel for the assessee submitted that the Assessing Officer computed long term capital gains at Rs. 86,45,99,912/- on the basis of the joint venture agreement dated 7.9.2009. According to the ld. Counsel, as per the joint venture agreement and the power of attorney given by the assessee, it would be effective only after the approval of construction received from the concerned authorities. During the year under consideration, the necessary approvals were not received from the concerned authorities, therefore, there was no transfer of interest in the immovable property. Referring to the copy of the joint development agreement which is available at page 34 of the paper book, the ld. Counsel submitted that the joint development agreement cannot be construed as delivery of possession by the asses....