TMI Blog2019 (1) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favour of assessee - I.T.A. No. 1791/Kol/2017 - - - Dated:- 28-12-2018 - Shri J. Sudhakar Reddy, AM And Shri A.T. Varkey, JM For The Appellant : Shri P.K. Srihari, CIT, DR For The Respondent : Shri R.N. Bajoria, Shri Asim Choudhury And Shri Rohan Poddar, Advocate ORDER Per Shri A.T.Varkey, JM This is an appeal preferred by the revenue against the order of Ld. CIT(A)- 22, Kolkata dated 11.05.2017 for AY 2013-14. 2. Grounds of appeal of the assessee are as under: 1. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in law in deleting the upward adjustment of ₹ 1,28,07,543/- ignoring provisions of section 92CA(3) of the I.T. Act. 2. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in treating the service charges as business income instead of house property income and allowing deduction of expenses and depreciation instead of deduction of 30% of annual rental value. 3. Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in allowing the claim of balance additional depreciation amounting to ₹ 6,36,83,752/- on the assets which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee brought to our notice that this issue is no longer res integra and drew our attention to assessee s own case for A.Y. 2006-07 (ITAT No. 188 of 2010 / G.A. No. 2777 of 2010 wherein the Hon ble Calcutta High Court has upheld the decision of the Tribunal and Ld. CIT(A) upholding the claims of the assessee. The question of law before the Hon ble Calcutta High Court was as under: Whether on the facts and circumstances of the case, the Learned Tribunal is justified in law in holding service charge received as business income instead of House Property without considering the decision of the latest judgment reported in 249 ITR 47 (Cal) 6. We note that the aforesaid grounds raised by the Revenue before the Hon ble High Court has been dismissed and the Tribunal s order to treat the service charges as business income instead from house property has been upheld. We note that the order of the Tribunal has been followed by the Ld. CIT(A) in the impugned order and also the Ld. CIT(A) has decided the lis by relying on the decision of the Jurisdictional High Court in the case of CIT vs Model Mfg. Co. reported in 175 ITR 374 (Cal) and in the case of CIT vs Russel Proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here are three jurisdictional Hon ble ITAT decisions in favour of the appellant namely: a. Birla Corporation Ltd. vs DCIT (2015) 69 SOT 217 (Kolkata ITAT) b. Century Enka Ltd. vs DCIT (2015) 37 ITR (Trib) 644 (Kolkata ITAT) c. Universal Cables Ltd. vs DCIT (2015) 57 taxmann.com 95 (Kolkata ITAT) Thus, following the aforesaid decisions, the said ground of appeal is allowed and decided in favour of the appellant. The Ld. AO is directed to allow additional depreciation of ₹ 6,36,83,752/-. However, as a consequence of allowing the said additional depreciation, the closing WDV of plant machinery as reported by the Appellant / Tax Auditor after deduction of additional depreciation will be carried forward. 9. Aggrieved the revenue before us. We have heard both the parties and also perused the relevant material available on record. The learned Senior Counsel for the assessee brought to our notice that this issue is no longer res integra and the Hon ble Karnataka High Court in CIT vs Rittal (India) Ltd. 388 ITR 423 has adjudicated similar issue wherein Hon ble High Court held as under: This appeal has been filed by the Revenue challenging the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant provisions has been construed reasonably and purposive without appreciating that the additional depreciation is allowed in the year of purchase and if in the year of purchase the assessee is eligible only for 50% depreciation, the balance 50% cannot be carried forward for the subsequent year on the claim cannot be allowed in any other year?' 6. The relevant provisions of Section 32 are reproduced below: Section 32. (1) In respect of depreciation of- ( i) buildings, machinery, plant or furniture, being tangible assets; ( ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed- ( i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed ; ( ii) in the case of any block of assets, such percentage on the written down valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncouraging industrialization, by either setting up a new industrial unit or by expanding the existing unit by purchase of new plant and machinery, and putting it to use for the purpose of business. The proviso to Clause (ii) of the said Section makes it clear that only 50% of the 20% would be allowable, if the new plant and machinery so acquired is put to use for less than 180 days in a financial year. However, it nowhere restricts that the balance 10% would not be allowed to be claimed by the assessee in the next assessment year. 9. The language used in Clause (iia) of the said Section clearly provides that a further sum equal to 20% of the actual cost of such machinery or plant shall be allowed as deduction under Clause (ii) . The word shall used in the said Clause is very significant. The benefit which is to be granted is 20% additional depreciation. By virtue of the proviso referred to above, only 10% can be claimed in one year, if plant and machinery is put to use for less than 180 days in the said financial year. This would necessarily mean that the balance 10% additional deduction can be availed in the subsequent assessment year, otherwise the very purpose of in ..... 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