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2021 (12) TMI 762 - AT - Income TaxAdditional depreciation u/s. 32(1)(iia) on block of assets like Computers and Software - AO disallowed the claim on the premise that the computers were installed in the office premises, thus would disentitle claim for additional depreciation within the meaning of the Proviso 2B to section 32(1)(iia) - HELD THAT:- It was a case of windmill for generation of power wherein additional depreciation was claimed by assessee. AO therein disallowed the claim on the ground that assessee was engaged only in manufacture of textile goods and setting up of windmill had no connection with the manufacture of textile goods. Assessee is already claiming 60% depreciation on the computers which are used for the purpose of business and in rendering of software development services to its associated enterprises. We note that the Ld.AO granted depreciation as per the provisions u/s. 43(3) read that Rule 5 as well as appendix-1 has been granted. Assets eligible for additional depreciation must be plant or machinery. Also that such plant or machinery should not be installed in any office premises or residential accommodation. We note that the development activity carried on by the assessee cannot be considered to be a manufacturing activity. Accordingly, relying on the decision of IBM World Trade Corporation [1977 (11) TMI 4 - BOMBAY HIGH COURT], we do not find any infirmity in the disallowance of additional depreciation to assessee. However, the alternative plea to allow the deprecation in the subsequent assessment year on the enhanced WDV of block of assets at the prevailing rates cannot be denied. - Decided in favour of assessee. Addition of CSR activities - as submitted that donations were made to eligible institutions and deduction u/s. 80G was claimed that pertained to such donations - HELD THAT:- Assessee has suo moto disallowed the expenditure towards the CSR responsibilities u/s. 37(1) of the Act and claimed deduction u/s. 80G to the extent of donations paid to eligible charitable institutions. Thus as relying on FIRST AMERICAN (INDIA) PVT. LTD. case [2020 (5) TMI 187 - ITAT BANGALORE] we direct the Ld.AO verify the payments made by assessee towards CSR that also forms part of deduction u/s. 80G. Ld.AO shall then grant the deduction claimed u/s. 80G of the Act in accordance with law. Accordingly, this ground raised by assessee stands allowed for statistical purposes.
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