TMI Blog2014 (6) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable u/s 32(1)(iia) in an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50% on account of usage - The so earned incentive must be made available in the subsequent year - overall deduction of depreciation u/s 32 shall definitely not exceed the total cost of plant machinery – thus, the order of the CIT(A) in respect of deletion of disallowance on account of additional depreciation is upheld – Decided against Revenue. - ITA No. 140/Ahd/2013 - - - Dated:- 31-5-2013 - Shri D. K. Tyagi And Shri A. K. Garodia,JJ. For the Petitioner : Sri Rahul Kumar, Sr.D.R. For the Respondent : None ORDER Per : D. K. Tyagi, Judicial Member:- This is the revenue s app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not and consequently whether additional depreciation u/s 32(1)(iia) is allowable on these machines or not. Since the issue has been decided by Hon ble ITAT Ahmedabad Bench in several cases in favour of the assessee including the decision in the case of assessee himself for A.Y. 2007-08 we are not inclined to interfere with the order passed by him and the same is hereby upheld. 4. The Second issue relates to additional depreciation of Rs. 4,98,859/-. Assessing officer has disallowed the balance additional depreciation claimed by assessee on the machinery installed in the second half of the previous year relevant to the A.Y. 2007-08. The assessee s contention was that he was eligible for additional depreciation @ 20 % on the plant and mach ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of production of any article or thing a further sum equal 15 % of actual cost of such machinery or plant shall be allowed as deduction under clause (ii) of section 33(1). This additional allowance u/s 32(1) (iia) is made available as certain percentage of actual cost of new machinery and plant acquired and installed. This provision has been directed to the setting up new industrial undertaking making or for expansion of the industrial undertaking by way of making more investment in capital goods. Thus, these are incentives aimed to boost new investments in setting up and expanding the units. The proviso to section 32(1)(iia) restricts the benefits in respect of following- 'Provided that no deduction shall be allowed in respect of_ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a period less than 160 days in the year of acquisition. This restriction is only on the basis of period of use. There is no restriction, that balance of one time incentive in the form of additional sum of depreciation shall not be available in the subsequent year. Section 32(2) provides for a carry forward set up of unabsorbed depreciation. This additional benefit in the form of additional allowance u/s 32(1)(iia) is one time benefit to encourage the industrialization and in view of the decision of Hon ble Supreme Court in the case of Bajaj Tempo vs. CIT, cited supra, the provisions related to it have to be constructed reasonably, liberally and purposive to make the provision meaningful while granting the additional allowance. This addi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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