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2016 (12) TMI 442 - ITAT CHENNAIAdditional depreciation in respect of the plant and machinery - Held that:- Section 32(1)(iia) provides for additional depreciation at the rate of 20%.The Assessing officer allowed 10% of additional depreciation in respect of the plant and machinery purchased during the A.Y.2009-10. The A.O. found that the additions to the fixed assests made in the second half of the financial year ,therefore,50% of the additional depreciation has been claimed.The balance 50% was carried forward in the next year. The A.O. found that the additional depreciation is allowable only during the year in which the machinery was installed and used for the business of the assessee. There is no provision in the Income tax Act.for carry forward of the additional depreciation to the subsequent year. Carefully gone through the judgment of the Hon'ble Karnataka High Court in the case of CIT vs Rittal India Pvt. Ltd. [2016 (1) TMI 81 - KARNATAKA HIGH COURT ] after extracting the provisions of section 32(1)(iia) of the Act ,found that beneficial legislation has to be interpreted liberally so as to benefit the assessee. Karnataka High Court also found that the intention of the legislation is to allow the additional benefit. The Karnataka High Court opined that the proviso would not restrain the assessee from claiming the balance of the benefit of additional depreciation in the subsequent assessment year. In view of the above, this tribunal is of the considered opinion that the assessee is entitled for remaining 10% of the depreciation during the year under consideration - Decided in favour of assessee Disallowance of lease rent paid - Held that:- As decided in assessee's own case for the A.Y. 2010-11& 2011-12 if as per the agreement, the lessor of the asset retains ownership of the asset and gives the asset to the assessee for use then the lease rent paid is allowable as deduction from the computation of income of the assessee. If according to the lease agreement, the ownership of the asset is transferred to the lessee, then in that case, the lease instalment comprising of the cost of the asset has to be capitalized by the assessee and on that the assessee is entitled to depreciation and the interest portion of the instalment is allowable deduction as revenue expenditure in the computation of income of the assessee. We find that in the instant case, the assessee has claimed deduction of the entire amount of lease rental of ₹ 12,42,820/- while computing the income for income tax purposes but has debited in the books of account only ₹ 3,98,733/- towards lease rent. Both the parties before us have not filed the copy of the lease agreement and therefore, we are not in a position to adjudicate the issue completely. We, therefore, are of the view that it will be in the interest of justice to restore this issue back to the file of the Assessing Officer to readjudicate the issue afresh in the light of the discussion herein above after examining the lease agreement of the assessee. Thus, the grounds of appeal of the assessee are allowed for statistical purposes
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