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2018 (12) TMI 1455 - ITAT KOLKATADepreciation on water supply scheme as well as for ‘road’ - CIT(A) allowed 100% depreciation for both water supply scheme and road as compared to 10% as per AO - Held that:- We note that the assessee is an authority established by the State Act (West Bengal Act) and is engaged in developing infrastructure facility like roads, water supply project and executes the projects undertaken for West Bengal Govt. Thus, the assessee an authority of State Govt. is seen to have installed machinery and plant which forms part of water supply project and which have been put to use for providing infrastructure facilities under clause (1) of sub section (4) of sec. 80IA of the Act. Since the assessee has installed machinery and plant for water supply project and which was put to use for the purpose of business of providing infrastructure facility, the assessee is eligible for 100% deduction which should be allowed and therefore we confirm the order of Ld CIT(A) on this issue We are not in agreement with the contention of the Ld. AR that the roads which the assessee has developed falls under item (3) because no machinery and plant can be installed on the road. Since the road which the assessee has developed does not fall under item (1) and item (3) then it has to fall under the residual item under (2) which provides for 10% depreciation and, therefore, the AO has rightly granted 10% depreciation for the roads developed by the assessee which action we uphold - we direct the AO to allow the assessee’s claim for 100% depreciation on water supply system and AO’s order allowing only 10% depreciation of roads is upheld. - Appeals of assessee and revenue are partly allowed.
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