TMI Blog2016 (11) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year, if certain condition was not fulfilled, but that would not restrain the assessee from claiming balance of the benefit in the subsequent assessment year. In the present case the assessee claimed 50% of depreciation allowable @ 20% under Section 32(1)(iia) of the Act and the remaining 50% was claimed in the year under consideration. Therefore, by following the ratio laid down in the case of Commissioner of Income Tax and Another Vs. Rittal India Pvt. Ltd., (2016 (1) TMI 81 - KARNATAKA HIGH COURT ) the impugned order is set aside and the Assessing Officer is directed to allow the claim of the assessee. - ITA No. 144/Del/2016 - - - Dated:- 12-9-2016 - SH. N.K. SAINI, ACCOUNTANT MEMBER For The Appellant : Sh. Rajesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase in brief are that the assessee filed its return of income on 29.05.2012, declaring loss of ₹ 91,37,920/- and paid the tax under Section 115JB of the Act on book profit of ₹ 10,05,460/-. Later on, the case was selected for scrutiny. The Assessing Officer during the course of assessment proceedings noticed that the assessee had claimed ₹ 51,23,970/- as additional depreciation for the machinery purchased in the assessment year 2011-12. He, therefore, asked the assessee to explain as to why the depreciation should not be disallowed as it was allowable only once. The assessee submitted that it had claimed 50% of depreciation in the assessment year 2011-12 as the machinery was put to use for less than 180 days. The contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the subsequent year. The legislature has provided the incentive scheme the manufacturer by giving them benefit of additional depreciation @20% on new plant machinery to encourage the industrialization in India. This additional benefit to give impetus to industrialization and the basic intention and purpose of these provisions can be fulfilled only when the assessee get the full benefit and this is possible only when there is no restriction in the statute to deny benefit of balance of 50% when the new plant and machinery were acquired and use for less than 180 days. Onetime benefit extended to assessee has been earned in the year of acquisition new plant and machinery. In section 32(1)(iia) the expression used is shall be allowed . Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fect, therefore, it shall only apply prospectively to the new plant machinery acquired and installed during the previous years relevant to the AY 2016-17 and subsequent assessment years. In the present case the new plant machinery were acquired and installed during the previous year 2010-11 relevant to the AY 2011-12 i.e. before the AY 2016- 17. In view of the unmistakable clarification provided by the Finance Act, 2015 read with Memorandum explaining the provisions of Finance Bill, 2015, the appellant is not entitled to claim balance 50% additional depreciation in the AY 2012-13 for new plant machinery which were put to use for less than 180 days during the PY 2010-11 relevant to A.Y.2011-12. 3.2 Being aggrieved from the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50% of depreciation was claimed. Reliance was also placed on the judgment of the Hon ble Supreme Court in the case of Allied Motors Pvt. Ltd. Vs. Commissioner of Income Tax (1997), 224 ITR 677(SC). 6. In his rival submissions, the learned Departmental Representative strongly supported the orders of the authorities below and reiterated the observations made by the learned Commissioner of Income Tax(Appeals) in para 5.3 of the impugned order. 7. It was further submitted that the amendment made vide the Finance Act, 2015 was not retrospective but prospective from 01.04.2016. Therefore, the amendment will take effect from the 1st April, 2016 and will accordingly apply in relation to the assessment year 2016-17 and subsequent years. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally and purposively, to made the provision meaningful while granting the additional allowance. 9. In the present case also, the assessee could not claim 100% of the depreciation in the year of installation of plant and machinery because it was put to use for the purpose of business for a period of less than 180 days and claimed 50% of depreciation in the year of installation of plant and machinery, the remaining 50% was claimed in the year under consideration. The Hon ble Karnataka High Court in the aforesaid referred case held that the intention of the legislation is absolutely clear that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to half being granted in one assessment year, if cer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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