TMI Blog2016 (3) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... - transfer u/s 2(47) - year of assessment - HELD THAT:- The physical possession of the property was handed over for carrying out the development activities. The assessee has also granted exclusive right to the developer to sell the property to various prospective purchasers. A bare reading of this agreement clearly shows that the assessee can get back 30% of the constructed area in lieu of 70% of the undivided share in the land given to the developer. Therefore, by way of an arrangement, the property was handed over to the developer for development. This kind of arrangement may not be transfer under common law. However, Income-tax Act, 1961, specifically defines an arrangement between the parties as transfer u/s 2(47) of the Act. This arrangement enables the developer to enjoy the property as its own or to sell the property as its own. Therefore, in view of this specific definition in sec. 2(47)(vi) of the Act, this Tribunal is of the considered opinion that there was a transfer of property during the year under consideration within the meaning of sec. 2(47) of the Act. Therefore, the capital gain has to be assessed only during the year under consideration. This Tribunal do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the balance 10% of the additional depreciation can be allowed during the year under consideration or not. This issue was examined by the Cochin Bench of this Tribunal in Apollo Tyres Ltd. v. ACIT(supra). The Cochin Bench found that the additional depreciation can be allowed in the next year in case the same cannot be allowed in the earlier year. In fact, the Cochin Bench has observed as follows:- 9. We have considered the rival submissions on either side and also perused the material available on record. Section 32(1)(iia) reads as follows: 32(1)(iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that no deduction shall be allowed in respect of Any machinery or plant which, before its (A installation by the assessee, was used either within or outside India by any other person; or Any machinery or plant installed in any offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessing during the previous year and has put to use for the purpose of business less than 180 days, the deduction shall be restricted to 50% of the amount calculated at the prescribed rate. Therefore, if the machinery is put to use in any particular year, the assessee is entitled for 50% of the prescribed rate of additional depreciation. The Income-tax Act is silent about the allowance of the balance 10% additional depreciation in the subsequent year. Taking advantage of this position, the assessee now claims that the year in which the machinery was put to use the assessee is entitled for 50% additional depreciation since the machinery was put to use for less than 180 days and the balance 50% shall be allowed in the next year since the eligibility of the assessee for claiming 20% of the additional depreciation cannot be denied by invoking Second Proviso to section 32(1)(ii) of the Act. 12. This issue was considered by the Delhi Bench of this Tribunal in the case of Cosmo Films Ltd (supra). The revenue has taken a similar ground as taken before this Tribunal that the assessee cannot carry forward the additional depreciation to be allowed in the subsequent assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n succeeding year. The extra depreciation allowable u/s 32(1)(iia) in an extra incentive which has been earned and calculated in the year of acquisition but restricted for that year to 50% on account of usage. The so earned incentive must be made available in the subsequent year. The overall deduction of depreciation u/s 32 shall definitely not exceed the total cost of machinery and plant. In view of this matter, we set aside the orders of the authorities below and direct to extend the benefit. We allow ground no.2 of the assessee's appeal. Since we have decided ground no.2 in favour of assessee, there is no need to decide the alternate claim raised in ground no.3. The same is dismissed. 13. This issue was also considered by another bench of this Tribunal at Delhi in SIL Investment Ltd (supra). At page 233 of the TTJ, the Tribunal has observed as follows: 40. There is nothing on record to show that the directions given by the learned CIT(A) are not proper. The eligibility for deduction of additional depreciation stands admitted, since 50 per cent thereof had already been allowed by the AO in the asst.yr.2005-06, i.e. the immediately preceding assessment year. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the developer. Therefore, the capital gains without any transfer cannot be assessed during the year under consideration. 8. On the contrary, Shri Pathlavath Peerya, ld. DR submitted that admittedly, there was an agreement between the assessee and M/s Godrej Properties Ltd for development of 20 acres and 26 cents lad in Sembarambakkam Village, Sriperumbudur Taluk. As per this agreement, M/s Godrej has to construct building on the land. The assessee is entitled for 30% of the constructed area. In lieu of 30% of the constructed area, the assessee has to transfer 70% of the undivided share in the property. In fact, the physical possession f the property was handed over to the developer. Referring to the agreement, the ld. DR pointed out that the assessee claims that the possession was not handed over to the developer in pursuance of part performance of contract u/s 53A of the Transfer of Property Act. The fact remains that the property was handed over to the developer in pursuance to an arrangement made between the assessee and M/s Godrej, therefore, in view of such arrangement, the assessee cannot get back 70% of the undivided share in the land. The assessee, at the best, can g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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