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2016 (6) TMI 926 - ITAT KOLKATA

2016 (6) TMI 926 - ITAT KOLKATA - TMI - Additional depreciation - plant and machinery acquired during the year which was utilized in the sales outlet of the assessee - Held that:- We find that installation of new plant and machinery in sales outlet/retail office would fall under clause (B) of proviso to section 32(1)(iia) of the Act. We are in complete agreement with the arguments advanced by the Ld. DR. Needless to mention that the assessee is entitled for the benefit of having its written down .....

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Pvt. Ltd [ 2002 (2) TMI 34 - RAJASTHAN High Court ] wherein it was held that electric generator clearly falls under renewal energy device and thereby eligible for enhanced rate of depreciation. - Decided in favour of assessee - I.T.A No.2413/Kol/2013 - Dated:- 1-6-2016 - Shri N. V. Vasudevan, JM & Shri M. Balaganesh, AM For The Appellant : Shri K.K.Chhaparia, FCA & Nirav Seth, ACA For The Respondent : Shri S. S. Alam, JCIT, Sr. DR ORDER Per Shri M. Balaganesh, AM: This appeal by assessee .....

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ng the year which was utilized in the sales outlet of the assessee, in the facts and circumstances of the case. 2.1. The brief facts of this issue are that the assessee is a manufacturer and retailer of apparels. The Ld. AO observed that assessee had claimed additional depreciation of ₹ 2,89,58,125/- on plant and machinery added during the year u/s. 32(1)(iia) of the Act. The said plant and machinery was installed at the sales outlet in the retail division of the assessee. Hence, the AO he .....

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is engaged in the business of manufacture of own article. It was claimed that admittedly, assessee is engaged in the manufacture of apparels and it does not matter where the new plant and machinery is installed i.e. in sales outlet. But Ld. CIT(A) invoked first proviso to section 32(1)(iia) of the Act and held new plant and machinery installed in other than manufacturing location and not utilized in manufacture of article is not eligible for additional depreciation. However, he granted relief t .....

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bad in law. The Ld. CIT(a) was unjustified in deleting the additions to the extent of ₹ 40,23,340/- only and not deleting the balance amount of ₹ 2,49,34,785/-. 2. For that in the facts and circumstances of the case, the Ld. CIT(A) erred in observing that additional depreciation u/s. 32(iia) is allowable only on Plant and Machinery used for the manufacturing process. In fact, the act only required that the assessee should be engaged in the business of manufacturing and the Plant & .....

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the decisions it was held that provisions of section 32(1)(iia) of the act does not state setting up of new plant and machinery which should have any operational connectivity to the article or thing that was already being manufactured by the assessee. 2.4. In response to this, Ld. DR argued that the assessee s case falls in the first proviso to section 32(1)(iia) of the Act wherein plant and machinery was installed in the sales outlet i.e. the office premises. In both the case laws relied on by .....

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l submissions and perused the material available on record. For the sake of convenience the provisions of section 32(1)(iia) of the Act are reproduced hereunder: 32(1) In respect of depreciation of …… (iia) 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 in the business of generation or ge .....

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re of a guest -house; or (C) Any office appliances or road transport vehicles; or (D) Any machinery or plant, the whole of the actual cost of 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 profession of any one previous year . 2.6. We find that installation of new plant and machinery in sales outlet/retail office would fall under clause (B) of proviso to section 32(1)(iia) of the Act .....

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The next issue to be decided in this appeal is as to whether the assessee is entitled for enhanced depreciation rate of 80% on Genset in the facts and circumstances of the case. 3.1. Brief facts of the case are that the assessee has claimed depreciation of 80% on Genset (Generator Sets). The Ld AO observed that as the assessee was not engaged in the manufacturing business as specified in New Appendix-1 of Rule 5 of I. T. Rules, the claim of the assessee for higher depreciation of 80% against the .....

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run on wind energy and even otherwise , electric generator is not renewable energy device. Accordingly, he upheld the depreciation allowed by the AO at 15% as against 80% claimed by the assessee. Aggrieved, the assessee is in appeal before us on the following ground: 3. For that in the facts and circumstances of the case, the Ld. AO erred in allowing depreciation @ 15% only as against depreciation @ 80% claimed by the assessee on Genset (Generator Sets), thereby reducing the depreciation claime .....

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argued that electric generator is run on diesel and hence not renewable energy device. He argued that renewable energy is generally defined as energy that is collected from resources which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat. Renewable energy often provides energy in four important areas electricity generation, air and water heating/cooling, transportation, and rural (offgrid) energy services. Based on this, he argued t .....

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to extract the relevant entry at clause (xiii) of item 10A of Appendix I appended to Income-tax Rules, which reads as follows: "Any special devices including electric generators and pumps running on wind energy." 3, According to the rules of construction, where two or more words which are susceptible of analogous meaning are coupled together noscitur a sociis, they are understood to be used in their cognate sense. They take, as it were, their colour from each other, the meaning of the .....

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