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2017 (5) TMI 1685 - ITAT CHENNAIAdditional depreciation u/s.32(1)(iia) - disallowance of claim as no increase in the installed capacity during the previous year to the extent of 25% as required u/s.32(i)(iia) to allow the additional depreciation - whether no solid backing has been provided to substantiate its claim for additional depreciation ? - HELD THAT:- AO brushed aside the Certificate issued by Chartered Engineer without verifying the facts of the case. If the AO is having some reservations regarding the capacity installation and for admission of the Chartered Engineers Certificate as an evidence, he should have examined the Chartered Engineer Certificate regarding the increase in capacity as per the provisions of the Income Tax Act before brushing aside the Chartered Engineers Certificate. The other alternative available for the AO is to make a personal visit along with Chartered Engineer and examine the correctness of increase in the installed capacity or refer the matter to DVO. Instead, the AO simply relied on the annual accounts in spite of the fact that the assessee has explained that the assessee it is engaged in manufacturing, the machinery which is unique to each customers custom built non-homogenous product and non-repetitive in nature which makes the measure of installed capacity as a subjective affair. CIT(A) made the personal visit to the factory and had discussed with reference to the measurement of the installed capacity on the basis of material removal ratio and given a finding that increase in capacity as percentage w.r.t. the earlier year is above 25%. For a query from the bench, the Ld.DR replied that the there was an increase in production more than 25% after installation of the plant and machinery and there were substantial increase in power consumption and other related items of productions. Considering totality of the facts that the CIT(A) has given clear analysis of measurement and made personal visit and given a finding that the increase in capacity as percentage is more than 25%. - Decided against revenue.
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