TaxTMI 
TaxTMI 
2022 (3) TMI 1184
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.... passed by Hon ITAT bench B ITA 2789/mum/2012 the said balance 50% depreciation is allowable in the assessment year as claimed by the assessee. 2. The learned CIT (Appeals VI), Pune has erred as well as in facts while confirming the order of Ld. AO Circle 8, Pune making the addition of Rs. 2,84,917/- under Rule 8D read with Sec. 14A in respect of dividend income being exempt u/s. 10 since the assessee has invested the funds in shares and mutual funds out of surplus generated from business and no borrowed funds are utilized for the same and in particular since no expenditure of whatsoever nature is claimed in the books of accounts in respect of earning the said dividend income and in effect provision of Rule 8D read with Sec. 14A are not applicable in the instant case of the assessee. 3. Alternatively and without prejudice to the ground of Appeal No. 2 hereinabove the addition be reduced to the reasonable extent by applying correct interpretation of Rule 8D read with section 14A of the Income Tax Act. 4. The Appellant craves the rights to add, delete, modify, alter any of the aforesaid grounds of appeal." 2. Brief facts of the case, as emanating from th....
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....year. 4.1. The assessee had acquired the said assets on 30/09/2011 as mentioned in the assessment order. Therefore, the assessee claimed 50% of the additional depreciation in AY 2012-13 and remaining 50% in AY 2013-14(year under consideration). 5. The Assessing Officer disallowed the claim of the assessee of additional depreciation for AY 2013-14. 6. The Ld. CIT(A) confirmed the disallowance made by the assessing officer of the Additional Depreciation. The CIT(A) in para 5.3 of the order has mentioned as under: Quote, "On this issue law is clear the existing provision of Section 32(1)(iia) does not allow/provide 50% additional depreciation in the subsequent year. In fact in this regard amendment has been made in the said section by inserting proviso after the second provision to sub-section (1) of Section 32 by Finance Bill 2015. This amendment has been made effective from 1st April 2016 and accordingly will apply for AY 2016-17 and subsequent years. In this regard it is important to note that this is incentive granted to encourage investment in plant and machinery by the manufacturing and power sector. This is not hardship removal and cannot be retrospective." Un....
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....up for consideration before the Division Bench of Karnataka High Court in Commissioner of Income Tax v. Rittal India Pvt. Ltd., reported in 380 ITR 423. The Court, after referring to the statutory provisions, held and observed in para 8 as under:--"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 April 1, 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 purposes of business. The proviso to clause (ii) of the said section makes it clear that only 50 per cent of the 20 per cent would be allowable, if the new plant and machinery so acquired is out to use for less than 180 days in a financial year. However, it nowhere restricts that the balance 10 per cent would not be allowed to be claimed by the assessee in the next assessment year. The lang....
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....ase may be, is acquired by the assessee during the previous year and is put to use for the purposes of business for a period of less than one hundred and eighty days in that previous year, and the deduction under this sub-section in respect of such asset is restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (iia) for that previous year, then, the deduction for the balance fifty per cent of the amount calculated at the percentage prescribed for such asset under clause (iia) shall be allowed under this sub-section in the immediately succeeding previous year in respect of such asset." 8. The third proviso, thus, now recognizes the right of an Assessee to claim the remaining 50% depreciation in subsequent year in a case where machinery and plant being acquired and put to use for less than 180 days in the previous year, the depreciation was restricted to 50%. Such a situation as in the present case, was considered by the Division Bench of the Madras High Court in Commissioner of Income Tax v. Shri T.P. Textiles Pvt. Ltd., 394 ITR 483, the Court referred to the judgment of the Karnataka High Court in Rittal India Pvt. Ltd., (supra....
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....es as to how the unamended provision had to be read all along. 11.5:-In any event, in so far as the court is concerned, it has to go by the plain language of the unamended provision, and then, come to a conclusion in the matter. As alluded to above, our view, is that, upon a plain reading of the unamended provision, it could not be said that the assessee could not claim balance depreciation in the assessment year, which follows the assessment year, in which, the machinery had been bought and used, albeit, for less than 180 days." 9. It could be thus, to seen that the Karnataka High Court in Rittal India Pvt., Ltd., (supra) even without the aid of the statutory amendment held that remaining 50% unclaimed depreciation would be available to the Assessee in the succeeding Assessment Year. Now the legislation has amended the provision by adding a proviso which, specifically recognizes the said right. The Madras High Court in Shri T.P. Textiles Pvt. Ltd., (supra) ruled that such proviso being clarificatory in nature, would apply to pending cases, covering past period also. 10. We have no reason to take view different from two High Courts, examining the situation at considerable length. I....
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....No. 685/PUN/2017 dated 22.11.2019 wherein the Tribunal on the issue has held as follows: ".................In this judgment of the Hon'ble Bombay High Court, there is reference made to the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Income Tax and another Vs. Rittal India Pvt. Ltd., 380 ITR 423 and the decision of the Hon'ble Madras High Court in the case of in the case of Commissioner of Income Tax Vs. Shri T.P. Textiles Pvt. Ltd., 394 ITR 483 and in both these cases, it has been unanimously observed and held that the assessee can claim balance depreciation in the subsequent assessment year. The Hon'ble Bombay High Court was of the opinion that there emerges no reason to take a different view from that taken by the aforesaid two High Courts, examining the situation at considerable length. Therefore, appeal of the Revenue was dismissed by the Hon'ble Jurisdictional High Court. Respectfully, following the binding judgment of the Hon'ble Jurisdictional High Court, we allow ground No. 8 raised by the assessee." Therefore, the view that emerges from the aforesaid judicial precedent is that the Hon'ble Karnataka High Court in t....