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The Commissioner of Income-Tax, LTU, The Asst. Commissioner of Income-Tax (LTU) Versus M/s Rittal India Pvt. Ltd. (No. 1)

2016 (1) TMI 81 - KARNATAKA HIGH COURT

Additional Depreciation u/s 32 - claim of 10% (50% of 20%) in the first year and balance 10% in the second year - Whether the Tribunal is correct in extending the benefit of Section 32(1)(iia) of the Act to the next assessment year when the income tax Act does not provide for such carryover, thereby violating the legal principles of "cassus omissus" which states that the courts cannot compensate for what the legislature has omitted to enact? - Held that:- The language used in Clause (iia) of the .....

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ce 10% additional deduction can be availed in the subsequent assessment year, otherwise the very purpose of insertion of Clause (iia) would be defeated because it provides for 20% deduction which shall be allowed.

Beneficial legislation, as in the present case, should be given liberal interpretation so as to benefit the assessee. In this case, the intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by th .....

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lly and purposively, to make the provision meaningful while granting additional allowance. We are in full agreement with such observations made by the Tribunal. - Decided in favour of assessee - ITA No. 268/2014 - Dated:- 24-11-2015 - Vineet Saran And S. Sujatha, JJ. For the Appellant : Sri K V Aravind, Adv For the Respondent : Sri T Suryanarayana, Adv JUDGMENT This appeal has been filed by the Revenue challenging the order of the Tribunal whereby full benefit of Section 32(1)(iia) of the Income .....

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er 01.10.2006 and before 31.03.2007, meaning thereby that it was put to use for the purpose of business for a period of less than 180 days. There is also no dispute with regard to the fact that under Section 32(1)(iia), read with second proviso to 32(1)(ii) of the Act, for the assessment year 2007-08, the respondentassessee could have been, and was granted benefit of 50% of the 20% of the amount of depreciation allowable under sub-section (ii) of Section 32(1) of the Act. 3. The dispute in the p .....

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heard Sri K.V.Aravind, learned counsel for the appellants as well as Sri T. Suryanarayana, learned counsel appearing for the respondent-assessee and perused the record. 5. This appeal has been filed raising the following two substantial question of law: "i. Whether the Tribunal is correct in extending the benefit of Section 32(1)(iia) of the Act to the next assessment year when the income tax Act does not provide for such carryover, thereby violating the legal principles of "cassus om .....

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n, the balance 50% cannot be carried forward for the subsequent year on the claim cannot be allowed in any other year?" 6. The relevant provisions of Section 32 are reproduced below: "Section 32. (1) In respect of depreciation of- (i) buildings, machinery, plant or furniture, being tangible assets; (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day o .....

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ip;……. (b)………. Provided further that where an asset referred to in clause (i) or clause (ii) or clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this subsection in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage pr .....

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) in the case of any new machinery or plant (other than ships and aircraft), 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 or generation or generation and distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii)." Provided…………" 7. Clause (iia) .....

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new industrial undertaking, or that it should be claimed in one year, have been done away by substituting clause (iia) with effect from 01.04.2006. The grant of additional depreciation, under the aforesaid provision, is for the benefit of the assessee and with the purpose of encouraging industrialization, by either setting up a new industrial unit or by expanding the existing unit by purchase of new plant and machinery, and putting it to use for the purpose of business. The proviso to Clause (ii .....

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