TaxTMI 
TaxTMI 
2021 (12) TMI 1130
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.... at the time of hearing.." 2. At the outset, it is noticed that the appeal filed by the Revenue is time-barred by 18 days. A separate application for condonation of the said delay has been filed, wherein reasons for the delay in filing this appeal have been mentioned. Considering the above reasons, we condone the delay. 3. The brief facts relevant to the issue are that the assessee is engaged in manufacturing of ball bearing and rubber products. The assessee acquired and installed certain plant and machinery during the financial year 2013-14 relevant to the assessment year 2014-15. As per the provisions of section 32(1)(iia) of the Act, the assessee was entitled to additional depreciation @ 20% of the actual cost of machinery. However, since the machinery was used for less than 180 days during the financial year under consideration, therefore the assessee in view of the 2nd Proviso to section 32(1), claimed depreciation @50% of additional depreciation i.e. @10% instead of 20% of the actual cost. The assessee claimed the remaining 10% additional depreciation during the next financial year i.e. F.Y 2014-15 relevant to A.Y 2015-16. However, the Assessing Officer disallowed the c....
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....iation, when the assessee had claimed initial 50% of additional depreciation in the year of purchase of asset as it is used for less than 180 days in terms of proviso to section 32(1) of the Act. The AO also noted that though later on amendment has come, it only comes to effect in the Finance Act, 2015 with effect from 01.04.2016 and noting that it is not a retrospective enactment, he disallowed the claim of the assessee. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who was pleased to give the relief to the assessee by holding as under: "After carefully considering the factual and legal matrix, I find myself in agreement with the appellant that the balance 10% additional depreciation has to be allowed in the next year. I also note that the Act has been amended vide Finance Act, 2015, as also that the Finance Act, 2015 has been brought in to enhance investments and hence the amendment is in the nature of a welfare measure. Moreover, it is also noted that there are three jurisdictional Hon'ble ITAT decisions in favour of the appellant namely: a. Birla Corporation Ltd. vs DCIT (2015) 69 SOT 217(Kolkata ITAT) b. Century Enka Ltd. vs DCIT: (2015) 37 IT....
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.... the assessee, whereas the Tribunal, vide its order dated 28.01.2014, has allowed the appeal of the assessee. Challenging the same, this further appeal has been filed by the Revenue. 4. We have heard Sri K.V. Aravind, learned counsel for the appellants as well as Sri T. Suryanarayana, learned counsel appearing for the respondent-assessee and perused the record. 5. This appeal has been filed raising the following two substantial question of law: 'i. Whether the Tribunal is correct in extending the benefit of Section 32(1)(iia) of the Act to the next assessment year when the income tax Act does not provide for such carryover, thereby violating the legal principles of "casus omissus" which states that the courts cannot compensate for what the legislature has omitted to enact? ii. Whether the Tribunal was correct in holding that additional depreciation allowed u/s. 32(1)(iia) is a one time benefit to encourage industrialization and the relevant provisions has been construed reasonably and purposive without appreciating that the additional depreciation is allowed in the year of purchase and if in the year of purchase the assessee is eligible only for 50% d....
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....er clause (ii). Provided............. " 7. Clause (iia) of Section 32(1) of the Act, as it now stands, was substituted by the Finance Act, 2005, applicable with effect from 01.04.2006. Prior to that, a proviso to the said Clause was there, which provided for the benefit to be given only to a new industrial undertaking, or only where a new industrial undertaking begins to manufacture or produce during any year previous to the relevant assessment year. 8. The aforesaid two conditions, i.e., the undertaking acquiring new plant and machinery should be a new industrial undertaking, or that it should be claimed in one year, have been done away by substituting clause (iia) with effect from 01.04.2006. The grant of additional depreciation, under the aforesaid provision, is for the benefit of the assessee and with the purpose of encouraging industrialization, by either setting up a new industrial unit or by expanding the existing unit by purchase of new plant and machinery, and putting it to use for the purpose of business. The proviso to Clause (ii) of the said Section makes it clear that only 50% of the 20% would be allowable, if the new plant and machinery so a....
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.... the plant and machinery is used for less than 180 days and 50% of additional depreciation has been allowed in that year, then the balance 50% of the additional depreciation shall be allowed in the immediately succeeding year. He has submitted that prior to insertion of the aforesaid Proviso w.e.f. 01.04.2016, there was no provision in section 32(1) of the Act to allow the balance depreciation in the succeeding year. He has submitted that the aforesaid Proviso has been made applicable prospectively from assessment year 2016-17. He, therefore, has submitted that for the assessment year i.e. A.Y 2015-16, the benefit of aforesaid amended section 32(1) cannot be given to the assessee. 7. We do not find any force in the above contention of the Ld. DR. We find that the amended provision of section 32(1) has been thoroughly discussed by the Hon'ble Jurisdictional High Court in the case of CIT vs Rittal (India) Ltd. (supra), wherein, the Hon'ble High Court has observed that the language used in Clause (iia) of the said Section clearly provides that additional depreciation equal to 20% of the actual cost of such machinery or plant shall be allowed as deduction. The Hon'ble Hi....