TMI Blog2017 (7) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... 50% of additional depreciation in the succeeding year when the plant and machinery was put in use for less than 180 days in the preceding previous year and directed the Assessing Officer to allow the additional depreciation as claimed by the assessee. Hence, the ground raised by the Revenue for both the assessment years is dismissed. Disallowance of the marketing service fees paid to India Piston Limited - HELD THAT:- Similar facts in an identical issue in assessee s own case for the assessment years 1999-2000, 2003-04 to 2005-06 [ 2011 (2) TMI 1417 - ITAT CHENNAI] as held IP Rings Ltd. does not have any market set up in its own and when specifically pointed out that there is already clause in the agreement for payment technical consultancy fee payable at 5%, the assessee s counsel asserted further that there was a dire need for such expenditure and it has been used for launching of the new product without which the assessee could not appropriately market the new product. But, when asked to supply certain data in details about judgment and other details, the assessee was unable to do so. We are inclined to concur with the conclusion as drawn by the ld. CIT(A), who is found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in assessee s own case for earlier assessment years, the ld. CIT(A) has directed the Assessing Officer to treat 25% of royalty payment as capital expenditure and the balance 75% as revenue expenditure. 2.2 On being aggrieved, both the Revenue as well as assessee are in appeal before the Tribunal. The main contention advanced by the ld. DR is that similar decision of the Tribunal in assessee s own case is pending before the Hon ble Madras High Court in TCA No. 964 of 2015 and therefore, he pleaded that the order of the ld. CIT(A) should be reversed. 2.3 On the other hand, the ld. Counsel for the assessee has submitted that the assessee has not acquired any ownership right in the technology and license but only right to use. Therefore, he has pleaded that the payment for mere right to use should be only revenue in nature and prayed that the entire royalty expenditure claimed by the assessee should be allowed as revenue expenditure. 2.4 We have heard both sides, perused the materials available on record and gone through the orders of authorities below. On careful consideration of facts and materials available on record, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the above decision of the Tribunal in assessee s own case (supra), we confirm the order of the ld. CIT(A) on this issue and dismiss the ground raised in both the appeals by the Revenue as well as assessee. 3. The next ground raised in the appeals of the Revenue is with regard to allowance of additional depreciation. 3.1 The brief facts of the case are that the assessee has claimed additional depreciation of ₹.11,45,893/- for the assessment year 2010-11 and ₹.69,36,223/- for the assessment year 2011-12. It was the submission of the assessee before the Assessing Officer that the grant of additional depreciation at the rate of 20% under clause (iia) of section 32(1) of the Act on new plant and machinery acquired, it has vested as an incentive for investments in new plant and machinery. The second proviso to clause (ii) of section 32(1) of the Act restricts the depreciation for that year in case of assets put to use for a period of less than 180 days in the previous year, it does not prohibit the claim of balance additional depreciation in the next financial year where the usage is in full. Accordingly, the assessee has claimed 10% of addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrive at a conclusion that the assessee is entitled to claim 50% of additional depreciation in the succeeding year when the plant and machinery was put in use for less than 180 days in the preceding previous year. 3.6 With regard to the reliance placed by the ld. DR in the case of MM Forgings Ltd. (supra), by considering section 32(1) as well as 32(1)(iia) of the Act, the Hon ble Jurisdictional High Court has held as under: 3. The Assessing Authority by applying the second proviso to section 32(1) of the Act, restricted the allowability of the depreciation to 50 per cent of the amount permissible under section 32(1)(iia) of the Act. According to the appellant, when it satisfied all the conditions stipulated under the provisos to section 32(1)(iia) of the Act, the Assessing Authority ought not to have restricted the depreciation permissible under the said section by resorting to the second proviso to section 32(1) of the Act. The learned counsel however fairly pointed out before us that in the second proviso to section 32(1) of the Act, that very clause (iia) itself was inserted by Finance Act, 2002 with effect from 01.04.2003. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ld. CIT(A) has rightly followed the decision of the Tribunal in the case of Lakshmi Technology and Engineering Industries Ltd. v. DCIT (supra) and directed the Assessing Officer to allow the additional depreciation as claimed by the assessee. Hence, the ground raised by the Revenue for both the assessment years is dismissed. I.T.A. Nos. 2667 2668/Mds/2016 4. The first common ground raised in both the appeals of the assessee is that the ld. CIT(A) has erred in confirming 25% of the royalty expenditure as capital expenditure and the remaining 75% as revenue expenditure by contending that the assessee has not acquired any ownership right in the technology and license but only right to use and pleaded that the entire royalty expenditure claimed by the assessee should be allowed as revenue expenditure. In Revenue s appeals, we have sustained the findings of the ld. CIT(A), who has rightly adjudicated the issue by following the decision of the Tribunal in assessee s own case for earlier assessment years. Thus, the ground raised by the assessee is dismissed in both the assessment years. 5. The next common ground raised in bot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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