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2015 (10) TMI 533 - ITAT CHENNAI

2015 (10) TMI 533 - ITAT CHENNAI - TMI - Additional depreciation on plant and machinery - Held that:- A perusal of the provisions of section 32 as applicable for the relevant assessment year clearly shows that additional depreciation is allowable on the plant and machinery only for the year in which the capacity expansion has taken place which has resulted in the substantial increase in the installed capacity. In the assessee’s case this took place in the assessment year 2005-06 and the assessee .....

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rcial principles of accounting, is made specifically allowable, through enactment of certain specific provisions of the Act, it is also a requirement that there should be similar specific provision which shows its applicability every year, unless the context strongly calls for such an interpretation. We are thus of the opinion that CIT(Appeals) was justified in confirming the disallowance of additional depreciation. - Decided against assessee. - I.T.A. No. 578/Mds/2015 - Dated:- 28-8-2015 - Shri .....

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Officer has observed as under: 4(ii). The assessee company has claimed additional depreciation on plant and machinery acquired and installed in the preceding years other than the new machinery acquired and installed during the previous year. As per the provisions of section 32 (1)(ii)(a), no deduction is allowable to any plant and machinery, the whole or the actual cost of which is allowed as deduction whether by way of depreciation or otherwise, in computing the income chargeable under the hea .....

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eligible for additional depreciation in the subsequent year since the plant and machinery lost its character of new plant and machinery. The assessee is eligible for additional depreciation only to the new plant and machinery acquired and installed during the previous year. The additional depreciation is only eligible to the new plant and machinery acquired and installed during a given year and cannot be extended to subsequent years as such plant and machinery will not qualify for additional de .....

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ery same way the Finance Act 2005 also provided 20% additional depreciation to the new plant and machinery. All the above referred amendments insisted and highlighted the acquisition and installation of new machinery or plant an specifically pointed out that no deduction is eligible to any plant or machinery, whole of the actual cost to which is allowed as a deduction (whether by way of depreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or .....

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assessee company has preferred appeal before the High Court of Madras. Therefore, for the current year also disallowance of claim of additional depreciation is made. 3. On appeal, the ld. CIT(A), by following his own decisions for the earlier assessment years 2008-09 and 2009-10 in assessee s own case, dismissed the ground raised by the assessee. 4. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The ld. CIT(A), by following his own de .....

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my earlier orders for the Asst. Year 2008-09 and 2009-10, I confirm the disallowance made by the Assessing Officer with regard to additional depreciation. This ground of appeal is dismissed. 5. Similar issue has been raised before the Tribunal in assessee s own case for the assessment year 2007-08 in I. T. A. No. 1824 & 1825/Mds/2010 vide order dated 04.04.2013, wherein the Tribunal has observed as under: 8. We have perused the orders and heard the rival submissions. There is no dispute that .....

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Said clause (iia) of Section 32(1) is reproduced hereunder:- 32 (1) In respect of depreciation of …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. …. … …. ….. ….. ….. ….. …. …. …. …. …. …. …. …. … …. ….. ….. …. …. …. …. … .....

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allowed in respect of (A) any machinery or plant which, before its installation by the assessee, was used either within or outside India by any other person; or (B) any machinery or plant installed in any office premises or any residential accommodation, including accommodation in the nature of a guest-house; or (C) any office appliances or road transport vehicles; or any machinery or plant, the whole of the actual cost of which is allowed as a deduction (whether by way of depreciation or otherw .....

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, for the impugned assessment year, it is no more a new machinery or plant. Once it is not a new machinery or plant, allowance under Section 32(1)(iia) cannot be allowed. Additional depreciation itself is only for a new machinery or plant. A claim of additional depreciation as made by the assessee, if allowed, will not be an allowance for a new machinery or plant. Intention of the Legislature was to give such additional depreciation in the year in which assets were put to use and not for any suc .....

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