TMI Blog2018 (2) TMI 1879X X X X Extracts X X X X X X X X Extracts X X X X ..... of additional depreciation which was not allowed in the preceding assessment year shall be allowed in the subsequent assessment year, concluded that the assessee is entitled for additional 50% depreciation in the assessment year which follows the assessment year in which the machinery had been bought and put to use for less than 180 days. We also found that the Coordinate Bench in the case of Rashtriya Chemicals and Fertilizers Ltd. [ 2016 (8) TMI 366 - ITAT MUMBAI] has taken similar view following the decision of the the Hon'ble Karnataka High Court in the case of CIT vs. Rittal India (P) Ltd. (supra). Respectfully following the said decisions we uphold the order of the learned CIT(A) and reject the grounds raised by the Revenue. - ITA Nos. 5403 & 5402/Mum/2016 (Assessment Years: 2009-10 & 2011-12) - - - Dated:- 23-2-2018 - Shri C.N. Prasad and Shri A.L. Saini, JJ. Appellant by: Shri V. Vidyadhar Respondent by: Shri Dinkle Hariya ORDER C.N. Prasad, These two appeals are filed by the Revenue against separate orders of CIT(A)-14, Mumbai dated 23.06.2016 for assessment years 2009-10 and 2011-12 arising out of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 50% of additional depreciation is not allowable in the subsequent assessment year. 4. On appeal the learned CIT(A), following the decision of the Hon'ble Jurisdictional High Court in the case of MITC Rolling Mills P. Ltd. (supra), the decisions of the Delhi Bench of the Tribunal in the case of Cosmo Films Ltd. (supra) and ACIT vs. SIL Investment Ltd. (54 SOT 54) directed the AO to allow 50% of additional depreciation during the current assessment year which was not allowed in the preceding assessment year because the plant and machinery was put to use for less than 180 days. 5. Before us the learned counsel for the assessee submitted that the issue in appeal has been decided in favour of the assessee by the Hon'ble Madras High Court in the case of CIT vs. Shri T.P. Textiles (P.) Ltd. 394 ITR 483) and the Mumbai Coordinate Bench in the case of Rashtriya Chemicals and Fertilizers ltd. vs. CIT in ITA No. 5160/Mum/2014 dated 29.06.2016. the learned counsel for the assessee also supported the orders of the CIT(A). 6. The learned D.R., on the other hand, vehemently supported the order of the Assessing Officer. 7. We have heard the rival s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 value thereof as may be prescribed: Provided .... (a) (b).... Provided further that where an asset referred to in clause (i) or clause (ii) or clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business or profession for a period of less than one hundred and eighty days in that previous year, the deduction under this subsection in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) 1`or clause (iia), as the case may be: Provided also Explanation 1 to Explanation 5 (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The grant of additional depreciation, under the aforesaid provision, is for the benefit of the assessee and with the purpose of encouraging 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, if 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 necessari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter: ..... To remove the discrimination in the matter of allowing additional depreciation on plant or machinery used for less than 180 days and used for 180 days or more, it is proposed to provide that the balance 50% of the additional depreciation on new plant or machinery acquired and used for less than 180 days which has not been allowed in the year of acquisition and installation of such plant and machinery, shall be allowed in the immediately succeeding previous year. This amendment will take effect from 1st April, 2016 and will, accordingly, apply in relation to the assessment year 2016-17 and subsequent assessment years. 11.2. A perusal of the extract of the Memorandum relied upon would show that the legislature recognised the fact that the manner in which the Revenue chose to interpret the provision, as it stood prior to its amendment would lead to discrimination, in respect of plant and machinery, which was used for less than 180 days, as against that, which was used for 180 days or more. 11.3. In our opinion, as indicated above, the amendment is clarificatory in nature and not prospective, as is sought to be contended by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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