TMI Blog2017 (2) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... (iia) of the IT Act will lead to an absurd result denying the additional depreciation to the assessee though admittedly the assessee has installed new plant and machinery. Under the circumstances, no error has been committed by the learned ITAT in allowing the additional depreciation at the rate of 20% on the plant and machinery installed by the assessee after 31st Day of March 2005 i.e. the year under consideration. No substantial question of law arise. - Decided in favour of the assessee - Tax Appeal No. 824 of 2016 - - - Dated:- 25-1-2017 - M. R. Shah And B. N. Karia, JJ. Mr KM Parikh, Advocate for the Appellant Mr Manish J Shah, Advocate for the Opponent JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad C Bench (hereinafter referred to as learned ITAT ) in ITA No.143/Ahd/2013 for AY 2006-07, the Revenue has preferred the present Tax Appeal to consider the following substantial question of law. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in law in allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation of ₹ 2,18,50,976/. [2.2] Being aggrieved by the order passed by the learned CIT(A) confirming the addition of ₹ 2,18,50,976/in the hands of the assessee by disallowing the additional depreciation, the assessee preferred appeal before the learned ITAT. By the impugned judgment and order the learned ITAT has allowed the appeal preferred by the assessee and has deleted the disallowance of additional depreciation of ₹ 2,18,50,976/. While passing the impugned judgment and order the learned ITAT has relied upon the decision of the Hon ble Supreme Court in the case of Commissioner of Income Tax vs. Surama Tubes (P.) Ltd. reported in 201 ITR 124 and the decision of the Calcutta High Court in the case of Bajaj Tempo Ltd. vs. Commissioner of Income Tax reported in 196 ITR 188. [2.3] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned ITAT in allowing the additional depreciation claimed of ₹ 2,18,50,976/at 20% under Section 32(1) (iia) of the IT Act on the plant and machinery as claimed by the assessee, the Revenue has preferred the present Tax Appeal to consider the following substantial question of law. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat equitable considerations are irrelevant in interpreting tax laws. It is submitted that therefore if the language used in section 32(1)(iia) of the IT Act is considered as it is and the said provision is construed / interpreted strictly and literally in that case as the plant and machinery was purchased prior to 31.03.2005 and installed in the year under consideration, the assessee shall not be entitled to additional depreciation at 20% under section 32(1)(iia) of the IT Act. Making above submissions it is requested to allow the present appeal and answer the question in favour of the Revenue and against the assessee. [4.0] Present Tax Appeal is vehemently opposed by Shri J.P. Shah, learned Counsel appearing on behalf of the assessee. It is submitted that in the facts and circumstances of the case the learned ITAT has not committed any error in allowing the additional depreciation under Section 32(1)(iia) of the IT Act on the plant and machinery as claimed by the assessee. [4.1] It is submitted by Shri Shah, learned Counsel appearing on behalf of the assessee that as such the issue involved in the present case is squarely covered by the decision of the Hon ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has relied upon the following decisions. 1. Chandulal Harjivandas vs. CIT (1967) 63 ITR 627 2. R.B. Jodha Mal Kuthiala vs. CIT (1971) 82 ITR 570 3. Shree Sajjan Mills Ltd. vs. CIT (1985) 156 ITR 585 4. Rajratna Naranbhai Mills Co. Ltd. vs. STO (1991) 189 ITR 90 5. Administrator Municipal Corporation, Bilaspur vs. Dattatray Dahankar 1992 AIR SC 1846 6. Director of Enforcement vs. Deepak Maharaj AIR 1994 SC 1775 7. K.P. Varghese vs. ITO (1982) 131 ITR 597 (SC) 8. CIT vs. J.H. Gotla (1985) 156 ITR 323 9. C.W.S. (India) Ltd. vs. CIT (1994) 208 ITR 649 10. Oxford University Press vs. CIT (2001) 3 SCC 359 11. Gujarat Urja Vikas Nigam Ltd. vs. Essar Power Ltd. (2008) 4 SCC 755 12. CIT vs. Texttool Co. Ltd. (2013) 263 CTR 257 13. Sanjeev Lal vs. CIT (2014) 365 ITR 389 14. Shashikala Devi vs. Central Bank of India Ors. (2014) 16 SCC 260 15. Sidhharth Vyas vs. Ravinath Misra (2015) 2 SCC 701 16. State of Kerala Ors. vs. A.P. Mammikutty (2015) 10 SCC 632 17. Shailesh Dhairyawan vs. Mohan Balkrishna Lulla (2016) 3 SCC 619 Making above submissions and relying upon decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery were replaced by the supplier at Germany on 13.12.2004 and therefore the said machinery could be installed during the year under consideration on 15.04.2005. According to the Revenue as the plant and machinery on which the additional depreciation is claimed was not acquired and installed during the year under consideration and therefore, twin conditions of acquisition and installation has not been satisfied, the assessee is not entitled to additional depreciation at 20% under Section 32(1)(iia) of the IT Act. Section 32(1)(iia) of the IT Act reads as under: 32. Depreciation (1) In respect of depreciation of buildings, machinery, plant or furniture owned by the assessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed (ii) in the case of any block of assets, such percentage on the written down value thereof as may be prescribed']: Provided that where the actual cost of any machinery or plant does not exceed 5 five thousand] rupees, the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Hon ble Supreme Court relied upon by the learned Counsel appearing on behalf of the assessee are required to be referred to and considered. [6.1] In the case of R.B. Jodha Mal Kuthiala (Supra) the Hon ble Supreme Court has observed that it is true that equitable considerations are irrelevant in interpreting tax laws. But, those laws, like all other laws, have to be interpreted reasonably and in consonance with justice. [6.2] In the case of Shree Sajjan Mills Ltd. (Supra), the Hon ble Supreme Court has observed that the principle that fiscal statutes shall be strictly construed does not rule out the application of the principles of reasonable construction to give effect to the purpose or intention of any particular provision as apparent from the scheme of the IT Act, with the assistance of such external aids as are permissible under the law. [6.3] While interpreting section 127A of the IT Act, in the case of Administrator Municipal Corporation, Bilaspur (Supra), the Hon ble Supreme Court has observed that the mechanical approach to construction is altogether out of step with the modern positive approach. The modern approach is to have a purposeful construction that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. This is in accord with the recent trend in juristic though not only in western countries but also in India, that the interpretation of a statute being an exercise in the ascertainment of meaning, everything which is logically relevant should be admissible. [6.6] In the case of J.H. Gotla (Supra), the Hon ble Supreme Court has observed and held that if strict literal construction leads to an absurd result i.e. a result not intended to be subserved by the object of the legislation ascertained from the scheme of the legislation, then, if another construction is possible apart from the strict literal construction, then, that construction should be preferred to the strict legal construction. It is further observed that where the plain literal construction of a statutory provision produces a manifestly unjust result which could never have been intended by the legislature, the court might modify the language used by the legislature so as to achieve the intention of the legislature and produce a rational result. [6.7] In the case of C.W.S. (India) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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