TMI Blog2018 (10) TMI 1804X X X X Extracts X X X X X X X X Extracts X X X X ..... al parts of plant and machinery, transport vehicle and on the office appliance - HELD THAT:- As decided in own case [ 2017 (12) TMI 1746 - ITAT AHMEDABAD] assessee has purchased certain spare parts in respect of the machinery which is used for the purpose of power generation units. We further find that the purchase of spare parts for the machinery was treated as capital expenditure and, therefore, makes the assessee eligible for claim of depreciation and also the claim of additional depreciation on the same. - Decided against revenue. - ITA No. 997/Ahd/2015 - - - Dated:- 31-10-2018 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member Revenue by: Shri R.C. Dandy, CIT-D.R. Assessee by: Shri S.N. Soparkar, A.R. ORDER Amarjit Singh, This revenue s appeal for A.Y. 2010-11, arises from order of the CIT(A)-2, Ahmedabad dated 29-01-2015, in proceedings under section 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short the Act . 2. The revenue has raised following grounds of appeal:- 1. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance made by the AO u/s 80IA amounting to ₹ 43,62,61,420/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessoing officer has stated that the assessee company is not entitled for any deduction during the year under consideration as the accumulated losses were more than the profit of this year. The assessing officer has stated that assessee failed to observe provision of section 80IA(5) before claiming the deduction and failed to calculate correct amount of deduction therefore he has disallowed the claim of deduction u/s. 80IA of the act to the amount of ₹ 43,62,61,420/- and added to the total income of the assessee. 5. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee. Relevant part of the decision of ld. CIT(A) is reproduced as under:- 3.3. Decision: I have carefully perused the order and submission made by the AR of the appellant. The AO has recomputed the deduction under section 80IA of the Act claimed by the appellant. He has considered the unabsorbed depreciation of the eligible unit in earlier years as unadjusted depreciation and accordingly considered the same as brought forward depreciation of the eligible unit and after adjusting unabsorbed depreciation, the claim of deduction under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly, the claim has rightly been made by the appellant. Reliance is also placed on recent judgments of ITAT Ahmedabad in the case of Sadbhav Engineering Ltd, 45 taxmann.com 333 and in the case of Jivraj Tea Industries Ltd. 42 taxmann.com 462. The head note of the decision in the later case is reproduced hereunder:- Section 80-1A of the Income-tax Act, 1961 - Deductions - Profits and gains from infrastructure undertakings (Computation of deduction) -Whether when an exporter exercises option of choosing initial assessment year as culled out in sub-section (2) of Section 80-IA from which it chooses its 10 years of deduction out of 15years, then only losses of years starting from initial assessment year alone are to be brought forward; loss prior to initial assessment year which has already been set-off cannot be brought forward and adjusted into period of ten years from initial assessment year -Held, yes- Whether where assessee had not suffered any loss in relevant years and brought forward loss or depreciation did not relate to initial years, same could not be reduced for determining amount for which deduction is to be allowed under section 80-IA - Held, yes [Para 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that subsection for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made . In the above sub-section, which prescribes the manner of determining the quantum of deduction, a reference has been made to the term 'initial assessment year'. It has been represented that some Assessing Officers are interpreting the term 'initial assessment year' as the year in which the eligible business/ manufacturing activity had commenced and are considering such first year of commencement/operation etc. itself as the first year for granting deduction, ignoring the clear mandate provided under sub-section (2) which allows a choice to the assessee for deciding the year from which it desires to claim deduction out of the applicable slab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that additional depreciation was not allowable on parts or important/essential parts of plant and machinery, transport vehicle and on the office appliance, therefore, he has disallowed the claim of the assessee. 9. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee. Relevant part of the decision of the ld. CIT(A) is reproduced as under:- 4.3. Decision: I have carefully perused the order and submission made by the AR of the appellant. The AO has disallowed the additional depreciation claimed by the appellant on plant and machinery. The AO has held that since the depreciation was not allowable on parts of important/essential parts of plant and machinery, transport vehicle and on office appliances, the claim was not admissible. The appellant on the other hand has submitted that additional depreciation has not been claimed by it on generation of plant and machinery but the same has been claimed on the plant and machinery which are used in the mining activity. The same has been claimed only on mining machinery and vehicles used in mining activity. The appellant has also submitted a list of mining mac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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