Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 56 - AT - Income TaxAdditional depreciation on plant and machinery - disallowance as appellant was not engaged in "manufacture or production of an article or thing" as required under Section 32(1)(iia) - Held that:- the post amended provision of Section 32(1)(iia) clearly stipulate that there should be manufacture or production of article or thing. The Tribunal in AY 2004-05 had categorically held that the intermediary Bitumen mix is not article or thing manufactured or produced by the assessee, therefore, the order of the Tribunal in assessee’s own case for AY 2004-05 is squarely applicable to the instant case. Therefore, we uphold the order of the CIT(A) in upholding the disallowance of additional depreciation as correct and in accordance with law and no interference is called for. - Decided against assessee. Re-computation of normal depreciation u/s 32(1)(ii) with reference to the enhanced value of the assets on which additional depreciation was disallowed in the earlier assessment year - Held that:- Under the scheme of the act, depreciation is to be allowed as a percentage of written down value of the assets. Thus, for one year if the claim of depreciation is not allowed then the opening written value of the same assets in the succeeding year to the extent of disallowance gets enhanced. In the instant case, in the earlier assessment years additional depreciation claimed by the assessee was not allowed by the Assessing Officer. The view of the Assessing Officer was confirmed by the ITAT. Since the additional depreciation was disallowed in earlier years to the extent of disallowance the written down value is to be enhanced and the depreciation is to be computed accordingly. This claim of the assessee is reasonable and justified and accordingly we direct the AO to compute normal depreciation u/s 32(I)(II) of the Act with reference to the enhanced value of the assets on which additional depreciation is disallowed in the earlier assessment year. - Decided in favour of assessee.
|