TMI Blog2013 (12) TMI 1657X X X X Extracts X X X X X X X X Extracts X X X X ..... law and on facts in allowing the assessee s claim of ₹ 2,97,038/- on account of depreciation on electrical fittings. 3. The Ld.CIT(A) erred in law and on facts in deleting the addition of ₹ 2,86,448/- U/s.40a(ia) on account of late payment of TDS. 2. The first ground is against allowing the claim of assessee u/s.80IB amounting to ₹ 6,95,585/-. The assessee has claimed deduction u/s.80IB at ₹ 6,95,585/- for claiming of deduction and audit report was not filed alongwith return. The A.O. gave reasonable opportunity of being heard on this issue which was availed by the assessee but the A.O. held that to the fact that the assessee had not submitted the required certificate from the Chartered Accountant alongwith re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 201 ITR 325 AO is directed to allow claim of deduction under Section 80IB. 4. Now the Revenue is before us. Ld. Sr. D.R. relied upon the order of the A.O. and argued that statutory requirement had not been fulfilled by the appellant. Therefore, he was rightly decided and disallowed the claim u/s.80IB at ₹ 6,95,585/-. At the outset, ld. A.R. argued that audit report was furnished before the A.O. at the time of assessment and Hon ble Gujarat High Court in case of CIT vs. Gujarat Oil and Allied Industries, 201 ITR 325, has held that if the assessee filed the audit report before the A.O. at the time of assessment, he should allow the claim of 80IB. Ld. A.R. further argued that various High Courts also held this view that deduction c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and equipments connected to projector and other film exhibition systems. Appellant therefore claimed that these are in the nature of plant which is essential for carrying on the business activity. The 15% rate of depreciation is on electrical fittings in the nature of wiring, switches, sockets, fans etc. These items are only incidental and supplementary to the business. However in the appellant s case, the equipments and fittings are amounting to ₹ 59,48,760. Electrical wiring, sockets and switches cannot be of this much value unless valuable equipments are part of it and therefore these items will not be subject to 15% depreciation applicable to electrical fittings. Appellant relied upon various decisions in which buildings, furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tings and equipments amounting to ₹ 59,48,760/-. The electric fittings are engaged for running the projector and film exhibition systems. Thus, the electric fittings and equipments are apparently in the nature of apparatus or plant which is essential for carrying on the main business activity of the assessee. The various High Courts have held that depreciation on items as per Rule are less but are used or fitted with the main plant and machinery and are integral part of the very plant and machinery for carrying on the business activity, the higher depreciation can be allowed. He relied upon the decision of Hon ble Supreme Court in case of CIT vs. Karnataka Power Corporation, 243 ITR 81, wherein Hon ble Supreme Court applied the functi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alised expenses on the ground that TDS was not paid in time. Appellant submitted that the entire TDS was paid on May 30, 2005 which is much before the due date of filing return. As per retrospective amendment by finance act 2008 the expense is allowable if TDs for the month of March is paid before due date of filing return. TDS in this case is prior to March 2005 and therefore amended provisions will not apply to the appellant. Appellant's argument that depreciation cannot be disallowed under section 40 (a) (ia) of IT act since it talks of expenditure by way of interest, commission, brokerages, fees for professional services. There is no provision which prohibits appellant from capitalizing the assets where TDS was not paid. Since se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it has been argued that the TDS has been deducted which has been paid on 30.05.2005 before the due date of filing of return. Therefore, it is allowable expenditure. 13. We have heard the rival submissions and perused the material on record. Strictly, depreciation cannot be disallowed where TDS on payment of capital item made but not paid in time. In this Section, items of TDS have been identified by the legislature and depreciation is not covered u/s. 40(a)(ia) and also the assessee paid TDS on 30.05.2005 before due date of return filed. Thus, we confirm the order of the CIT(A) and dismiss the appeal of the Revenue. 14. In the result, the Revenue s appeal is dismissed. This Order pronounced in open Court on 13.12.2013 - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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