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2019 (11) TMI 208 - AT - Income TaxAdditional depreciation claimed on new Plant and Machinery in accordance with the provisions of Section 32(i)(iia) - HELD THAT:- No merit in the arguments advanced by the ld. counsel. The provisions of section 32(1)(iia) clearly mention that in the case of any new machinery or plant which has been acquired and installed after the 31st day of March, 2005 by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to 20% of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii). Thus, an analysis of the aforementioned provision shows that the assessee has to by new machinery or plant and not for replacement of any part of the plant or machinery. A perusal of the list of assets on which additional depreciation has been denied by the Assessing Officer shows that these are mainly replacement of various plant & machinery earlier in use. We, therefore, do not find any infirmity in the order of the CIT(A) rejecting the claim of additional depreciation on the ground that the various items are not new machinery which has been purchased by the assessee, but, it is in the nature of repair and maintenance of the existing machinery. The grounds raised by the assessee on this issue are accordingly dismissed. Disallowance on account of reclassification of certain assets as ‘Building other than Residential’ - eligible for depreciation at 10%, which were originally classified by the Appellant as ‘Plant and Machinery’, eligible for depreciation at 15% - HELD THAT:- No infirmity in the order of the CIT(A) on this issue. The coal shed and GI sheets, in our opinion, cannot be considered as plant & machinery when the assessee is engaged in manufacture of cement. We find merit in the logic given by the CIT(A) that the godowns, warehouses and other buildings which are utilized in an ordinary manner even for housing plant or machinery would not become plant or machinery by itself. Further, he has also given a finding that the GI sheets are such material which are utilized for the plant and by its nature this cannot be characterized as plant or machinery. Under these circumstances, we uphold the order of the CIT(A) and dismiss the grounds raised by the assessee on this issue. Disallowance of net of depreciation on account of capitalization of 25% of Technical Know-how Fee incurred by the Appellant in the subject year - addition on the ground that such expenses have resulted in benefits of enduring nature to the Appellant and thereby constitutes a capital asset - HELD THAT:- We hold that the ld.CIT(A) is not justified in upholding the action of the Assessing Officer in treating 25% of the technical know-how fees as capital in nature. We, therefore, set aside the order of the CIT(A) on this issue and direct the Assessing Officer to treat the entire amount as revenue in nature. The grounds raised by the assessee on this issue are accordingly allowed. See HERO HONDA MOTORS LIMITED [2015 (2) TMI 368 - DELHI HIGH COURT]
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