TaxTMI 
TaxTMI 
2021 (12) TMI 690
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....That the learned Commissioner of Income Tax (Appeals) erred in confirming the addition of additional depreciation of Rs. 57,91,898/- claimed by the assessee company @ 10% in respect on new plant & machinery acquired by it after September 30, 2012 (AY 2013-14). The quantum of additional depreciation allowable in respect of these assets was restricted to 50 percent of 20 percent of the actual cost of machinery in assessment year 2013-14 in view of the restrictive provision provided under the Act (i.e. as per the second proviso to section 32(1) of the Act). The balance 50% of additional depreciation amounting to Rs. 57,91,898/- has been claimed during the assessment year 2014-15. The learned Commissioner of Income Tax (Appeals) ignore....
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..... The Assessing Officer also made addition of Rs. 62,917/- on account of undisclosed income/TDS as well as Rs. 23,75,190/- towards interest on refund. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that the additional depreciation claimed by the assessee was according to the provisions of Section 32(1)(iia) which was introduced in the Finance Act, 2002 as an incentive provision for fresh investments in the Industrial Sector w.e.f. 1/4/2003. During the Assessment Year 2013-14 the assessee claimed additional depreciation of Rs. 57,91,898/- at 10% in respect of new Plant and Machinery acquired after 30/09/2012. The quantum o....
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....ovision, in particular, the proviso incorporated therein. The Karnatake High Court, in the said case, has come to the conclusion that additional depreciation granted under clause (iia) of Section 32(1) of the Act is for the purpose of affording benefits to the Assessees and, to encourage industrialization, either by setting up a new industrial unit, or, by expanding a new industrial unit, by purchasing and installing a new machinery, or, plant, and putting the same to use for the purposes of business. 8.1. The Court, went on to say, that while, the proviso appearing in Section 32(1) restricts the claim of depreciation to 50% of the amount calculated at the percentage prescribed for an asset referred to in clause (iia), nowhere does....
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.... be allowable, if the new plant and machinery so acquired is put to use for less than 180 days in a financial year. However, if nowhere restricts that the balance 10% would not be allowed to be claimed by the assessee in the next assessment year. 9. The language used in Clause (iia) of the said Section clearly provides that "a further sum equal to 20% of the actual cost of such machinery or plant shall be allowed as deduction under Clause (ii)". The word "shall" used in the said Clause is very significant. The benefit which is to be granted is 20% additional depreciation. By virtue of the proviso referred to above, only 10% can be claimed in one year, if plant and machinery is put to use for less than 180 days in the said financial....