2022 (8) TMI 486

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s of appeal:- "1. The Learned AO and the commissioner (Appeals) erred in denying the additional depreciation on the exchange rate fluctuation loss on new Plant and Machinery purchased during the earlier year. 2. The Learned AO and the Commissioner (Appeals) erred in ignoring the alternative claim of the appellant for adding the subject forex loss to the block of assets for the purpose of claiming tax depreciation." 3. Brief facts of the case are that the assessee company is engaged in the manufacture of automobile components filed its return of income for the assessment year 2010-11 on 06.10.2010 admitting total income of Rs. Nil. During financial year relevant to assessment year 2010-11, the assessee company claimed ad....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ection 43A of the Act, the assessee can capitalize exchange loss incurred on plant & machinery purchased from outside India. The learned A.R. for the assessee further referring to provisions of section 32(1)(iia) of the Act, submitted that as per said provisions, the assessee can claim additional depreciation on plant & machinery acquired and installed, if certain conditions are satisfied. In this case, the assessee has satisfied conditions prescribed u/s.32(1)(iia) of the Act, and claimed depreciation @ 20%on new plant &machinery acquired and installed during the previous year. The Assessing Officer as well as the learned CIT(A) without appreciating facts has rejected claim of the assessee. 5. The learned D.R., on the other hand, suppor....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....quent financial year on capitalized value of forex loss incurred on plant & machinery purchased during earlier financial year. According to the assessee, loss incurred on foreign fluctuation loss incurred for acquisition of plant & machinery should be capitalized to cost of asset as per provisions of section 43A of the Act, and once loss incurred by the assessee goes to increase W.D.V of new plant & machinery, then, the assessee is entitled for additional depreciation as per provisions of section 32(1)(iia) of the Act. 7. We have gone through reasons given by the Assessing Officer to reject additional depreciation on capitalization of forex loss in light of provisions of section 32(1)(iia) of the Act, and we ourselves do not subscribe to....