TMI Blog2016 (1) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... al depreciation u/s 32(1)(iia) - Withdrawal of additional depreciation earlier allowed to the assessee by AO u/s 154 - CIT(A) allowed the claim - Held that:- Additional depreciation cannot be denied to the assessee merely on the ground that electricity is not a article or thing. Since the issue is highly debatable, a view taken by the AO while computing the assessment cannot be revised u/s 154 of the Act. We therefore, find no justification to interfere with the order of Ld. CIT(A) as he has rightly adjudicated the issue. - Decided against revenue - ITA No.513, 514/LKW/2015 - - - Dated:- 16-10-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Dr. A.K. Singh CIT, DR For T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igures, the surcharge education cess was levied. This method of tax calculation was adopted in the subsequent order passed by AO u/s. 154/251 dated 31.01.2014 also. 4. Subsequently, the appellant was served with a notice u/s. 154 dated 24.07.2014 proposing to rectify the following mistake pointed out in the said notice:- it has been noticed from the ITNS- 150 that MAT credit has been allowed before charging of surcharge education cess whereas, the same should have been allowed after charging surcharge education cess. Therefore, the same have been required to allow as per provisions of the Act. 5. In response to the notice of AO dated 24.07.2014, the appellant had filed its reply dated 04.08.2014 whereby, the appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia (Supra) directed the AO that while computing the tax, first give credit of MAT and thereafter, charge the surcharge education cess. 9. Aggrieved the Revenue is in appeal before the Tribunal and has placed reliance on the order of the AO. 10. Ld. counsel for the assessee on the other hand submitted that correct mode of computation of tax is to first give credit of MAT and thereafter, charge the surcharge educational cess. 11. Having carefully examined the order of lower authority, we find that CIT(A) has correctly understood the mode of computation of tax and issued correct direction to the AO that while computing the tax, first give credit of MAT and thereafter, charge the surcharge education cess. Since we do not find a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional depreciation allowed earlier vide assessment order dated 24-12- 2010, under clause (iia) of Section 32 of ₹ 31,53,44,771/- attributable to the power Generating be units not withdrawn on the ground that under section 32(l)(iia) of the Act, additional depreciation on Plant Machinery has to be granted to the assessee who is engaged in the manufacturing or production of any article or thing. Since the electricity being not an item which has to be termed as manufacturing or production of any article or thing hence, additional depreciation granted on plant and machinery used for generation or distribution of power is not allowable. Further, as per section 32(l)(iia), the word [or in the business of Generation or generation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. has disallowed the claim of additional depreciation on power units on the ground that electricity being not an item which has to be termed as manufacture or production of any article or thing. The view taken by the A.O. is not correct. The Hon'ble Supreme Court in the case of CST VS M.P, Electricity Board clearly held that electric energy has all trapping of an article or thing. The process of its generation is also akin to manufacture or production of an article of thing. This view has also been followed by the Hon'ble ITAT, Delhi Bench in the case of N.T.P.C. Ltd. Vs. by. Commissioner of Income Tax. Further, Hon'ble Madras High Court and Gujarat High Court in the judgment as cited above have clearly held that if an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced reliance upon the order of the CIT(A). Besides, it was also contended that since the claim of depreciation of the assessee depends upon the interpretation of article or thing and is a debatable issue, it cannot be withdrawn u/s 154 of the Act. 19. Having carefully examined the order of the lower authority in the light of rival submission, we find that in the original assessment the claim of additional depreciation was allowed by the AO and later on u/s 154 of the Act, the Assessing Officer made a rectification in the order by making the withdrawal of additional depreciation earlier allowed to the assessee. We have also carefully examined the judgment of the ITAT Delhi Bench in the Case of NTPC Ltd. Vs. DCIT in which the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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