TaxTMI 
TaxTMI 
2020 (1) TMI 1367
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....the design and manufacture of computer software. For the assessment year 2009-10, the assessee filed its return of income on 309-2009 declaring an income of Rs. 82,96,19,519/-. The case was selected for scrutiny and the assessment was concluded u/s 143(3) read with sec 144C on 22-4-2013 determining the total income at Rs. 284,39,22,040/-. 3. On perusal of the assessment records, the CIT in exercise of his powers under section 263 of the Act, was of the view that the Assessment Order passed by he AO was erroneous and prejudicial to the interest of the revenue for the reason that the Assessee had claimed additional depreciation on plant and machinery under sec 32(1)(iia) amounting to Rs. 1,95,32,382/-. According to the CIT, on verification....
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....IT was of the view that there is no details of the purpose for which the same are used while the additional depreciation is claimed on the whole of the new assets added during the year except on used items purchased. The assessee has mentioned in the note below the depreciation schedule that Rs. 3,01,30,138/- is the second hand assets out of total assets of Rs. 33,46,87,781/-. The CIT was of the view that the Assessing Officer failed to verify the genuineness of the claim as the deduction is over and above the normal depreciation allowed with specific intention by the legislature. According to the CIT the AO by not verifying the claim and without establishing that the new assets are plant and machinery used for manufacturing activity and no....
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....IT has erred in law and on facts in not appreciating the Appellant's submission that: - the Honourable High Court of Punjab and Haryana in the case of CIT Vs Punjab Wireless System Limited (296 ITR 489), in the context of Investment Allowance under section 32A of the Act, held that if appliances are capable of being installed and used in any place where people work or gather, and desire to communicate, such items cannot be construed as office appliances - the only requirement for claiming deduction under section 32(1)(iia) of the Act is that the assessee should be engaged in the business of manufacture or production of any article or thing and the section does not require that the assets to be directly used in the proc....
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.... machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed- (i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the 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: "(iia) in th....
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.... of section 32(1)(iia ) what is required to be satisfied in order to claim the additional depreciation is that a new machinery or plant, which has been set up, should have been acquired and installed after 31-3-2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed after 31-3-2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a windmill had nothing to do with the manufacture of textile goods was totally not germane to the specific provision containe....