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2016 (5) TMI 639 - ITAT CHENNAI

2016 (5) TMI 639 - ITAT CHENNAI - TMI - Claim of additional depreciation - Machines were acquired during the previous financial year but put to use during the current financial year - Held that:- The facts brought on record shows that the plant and machinery does not a new plant and machinery acquired in the assessment year under consideration. The first requirement for claiming additional depreciation is that it should be a new plant and machinery. The machinery was new only when it is first pu .....

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m of additional depreciation in succeeding year on machinery, though it was acquired in earlier year. That cannot be any presumption that unless a claim is specifically denied, it has to be allowed. In our opinion, each assessment year is separate and independent assessment year. The provisions of the section 32 of the Act do not provide for postponement or carry forward of the residual additional depreciation, if any, in subsequent assessment years. Further, it is to be noted that when an allow .....

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not new in the assessment year under consideration.

Thus in the present case, this plant and machinery already capitalized in the earlier assessment years and also appeared in the block of assets. In our opinion, the assessee is not entitled to additional depreciation u/s.32(1)(iia) of the Act on the machineries acquired not in the Financial year 2010-11 relevant to the assessment year 2011-12. - Decided against assessee - I.T.A.No.1932/Mds. /2015 - Dated:- 6-4-2016 - SHRI CHANDRA PO .....

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Ld CIT(A) erred and directed the Assessing Officer to allow additional depreciation as claimed by the assessee on the basis normal depreciation. 2.2 The Learned CIT(A) erred and has failed to know the assessee filed the revised return for the assessment year 15/08/2013(beyond due date). The revised return of income should have been filed before 31/03/2013 for the same should be valid. - 2.3 The Learned CIT(A) erred and that the assessee has claimed additional depreciation In the case of any new .....

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ed in the business of cement manufacturing and its cement manufacturing plant is located at Yanakondla village, Kurnool District, Andhra Pradesh. The assessee had commenced business only during Financial Year 2010-11. In its return of income filed dated 28.09.2011, the assessee had declared a current year loss of ₹ 225,73,97,518/-. Subsequently, the assessee revised its return of income on 15.08.2013 wherein the assessee claimed additional depreciation and increased its current year loss o .....

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urn filed was invalid return. The AO also observed that the machineries were not acquired and installed in same Financial Year 2010-11 relevant to assessment year 2011-12 and there already existed in block of plant and machinery of ₹ 671,46,33,632/- as on 31.03.2010 and at best the additional depreciation for the Financial Year 2010-11 can at best be restricted to the plant and machinery hired after 31.03.2010. According to the AO, the machineries were acquired and installed during the Fin .....

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s. Further, Ld.CIT(A) observed that the AO granted he normal depreciation on plant and machinery which were purchased in the earlier also. But only for the purpose of granting additional depreciation, the AO treated he entire purchase of plant and machinery as not new one. The Ld.CIT(A) further observed that the action of the AO is contrary to his own finding by granting normal depreciation on the entire value of plant and machinery rather than the depreciated value as alleged by AO. Ld.CIT(A) o .....

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g the Tribunal decisions in the case of K.L.Concast Pvt Ltd. vs. DCIT for assessment year 2009-10 reported in 52 Taxmann.com 445 and also in the case of CRI Pumps Pvt. Ltd. Vs. ACIT for assessment year 2007-08 reported in [2013] 34 Taxmann.com 123 and Circular No.3/2006 dated 27.02.2006 observed that the assessee is eligible for the claim of additional depreciation on the plant and machinery installed till the date of commencement of production. Aggrieved with the order of the Ld.CIT(A), the Rev .....

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ciation in the assessment year 2011-12. On the other hand, ld.A.R relied on the order of CIT(A) and also the following decisions with elaborate submissions. a) Goetze (India) Ltd., V. CIT in [2006] 157 Taxman 1 (SC) b) ITO Vs. Sri Balaji Sago & Starch Products in [2012] 19 Taxmann.com 313(Chennai) c) M/s.Refex Refrigerants Ltd. v. ITO in IA No.967/Mds./2012 dated 31.07.2012 d) CIT v. Pruthvi Brokers & Shareholders in [2012] 23 taxman.co,23(Bom.) e) Ramco Cements Ltd. V. DCIT in [2015] 55 .....

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al depreciation. This was made clearly by CBDT Circular No.14(X4-35) dated 11.04.1955. The same view was taken by the Co-ordiante Bench Chennai in the case of M/s.Refex Refrigerants Ltd. v. ITO in IA No.967/Mds./2012 dated 31.07.2012 wherein held that filing the revised return belatedly cannot go in a way to deny the deduction u/s.32(i)(ii) of the Act. Being so, in our opinion to that extent we are not in agreement with the ld.D.R. 7. Coming to the main issue of granting deduction u/s.32(1)(ii) .....

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ion of any article or thing. The facts brought on record shows that the plant and machinery does not a new plant and machinery acquired in the assessment year under consideration. The first requirement for claiming additional depreciation is that it should be a new plant and machinery. The machinery was new only when it is first put to use. When it is already installed in earlier assessment year, it was no more new machinery or plant. Once it was not a new machinery or plant, the additional depr .....

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