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TMI Blog2021 (1) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) has erred in law and on facts in deleting the disallowances of additional depreciation on Milk CANs & Equipments of Rs. 40,36,716/-." 3. The assessee has filed return of income on 29th Sep, 2013 declaring total income of Rs. 1,17,39,180/- for the year under consideration. The case was subject to scrutiny assessment and notice u/s. 143(2) was issued on 2nd Sep, 2014. Assessment u/s. 143(3) of the Act was finalized on 4th March, 2016 and total income was assessed at Rs. 7,60,88,277/-. The Assessing Officer has made disallowance u/s. 80P(2)(d) of the Act and also disallowed the additional claim of depreciation on account of plant and machinery. However, the ld. CIT(A) has deleted the disallowance and addition made by the Assessing Officer. The relevant facts pertaining to the issues are discussed while adjudicating the grounds of appeal as follows. Ground No. 1 (Deleting the disallowance u/s. 80P(2)(d) of Rs. 2,32,84,772/-) 4. During the course of assessment, the Assessing Officer observed that assessee has made investment in shares and securities to the amount of Rs. 7,91,89,690/- and also borrowed funds to the amount of Rs. 185.81 crores as on 31st March, 2013 and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also upheld the decision made by CIT(A). 3.5. In view of the above and considering the decision of Honourable ITAT, Ahmedabad 'A' Bench and Honourable Gujarat High Court, the disallowance u/s. 80P[2](d) made by the AC is deleted. The ground of appeal is accordingly allowed." 6. During the course of appellate proceedings before us, the ld. counsel has submitted that identical issue was contested in favour of the assessee by the Co-ordinate Bench of the ITAT in the case of assessee itself for assessment year 2009-10 vide ITA No. 2613/Ahd/2012 and also in assessment year 2012-13 vide ITA No. 1905/Ahd/2016. The ld. counsel has also submitted that Hon'ble Jurisdictional High Court has also affirmed the finding of the ITAT for assessment year 2009-10 vide Tax Appeal 473 of 2014 and for assessment year 2012-13 vide Tax Appeal No. 1312 of 2018. The ld. Departmental Representative is fair enough not to contradict these undisputed facts that the case of the assessee is covered by the judicial pronouncement as referred by the ld. counsel. 7. Heard both the sides and perused the material on record. With the assistance of ld. representatives, we have gone through he decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, respectfully following the decision of the Coordinate Bench as elaborated above which was affirmed by the Hon'ble Jurisdictional High Court of Gujarat vide tax appeal no. 473 of 2014, we do not find any infirmity in the decision of ld. CIT(A). Accordingly, this ground of appeal of the Revenue is dismissed. Ground No. 2(Deleting the disallowance on additional deprecation of Rs. 3,21,16,870/- claimed as plant and machinery other than milk can equipments ) 8. During the course of assessment, the Assessing Officer noticed that assessee has claimed additional depreciation amounting to Rs. 3,21,16,870/- equal to 10% of the cost of the machinery purchased and put to use for the period less than 180 days in the F.Y. 2011-12. The Assessing Officer stated that as per provision of section 32 additional deprecation is allowable on the plant and machinery only for the year in which the capacity expansion has taken place and not in the subsequent year. The Assessing Officer was of the view that additional deprecation is allowable only for the year in which the capacity explanation have taken place and accordingly, disallowed the balance 10% claim for the current year. 9. Aggrieved asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of additional depreciation on account of non-user of the machinery over a period of 180 days or more should be claimed in the next assessment years. The discussion made by the ITAT has been reproduced by the ld.CIT(A), and it is worth to take note as under: "17. We have heard both the sides on this issue. Section 32(1) (iia) inserted by Finance (No. 2) with effect from 1.4.2003. In speech of Finance Minister this clause was inserted to provide incentive for fresh investment in industrial sector. This clause was intended to give impetus to new investment in setting up a new industrial unit or for expanding the installed capacity of existing units by at least 25 % thereafter these provisions were amended by the Finance (No.2) Act of 2004 w.e.f. 1.4.2005 and provided that in the case of any machinery or plant which has been acquired after the 31 st day of march, 2005 by an assessee engaged in the business of manufacture of production of any article or thing a further sum equal 15 % of actual cost of such machinery or plant shall be allowed as deduction under clause (ii) of section 33(1). This additional allowance u/s 32(1) (iia) is made available as certain percentage of actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncourage the industrialization and in view of the decision of Hon'ble Supreme Court in the case of Bajaj Tempo vs. CIT, cited supra, the provisions related to it have to be constructed reasonably, liberally and purposive to make the provision meaningful while granting the additional allowance. This additional benefit is to give impetus to industrialization and the basic intention and purpose of these provisions can be reasonably and liberally held that the assessee deserves to get the benefit in full when there is no restriction in the statute lo deny the benefit of balance of 50% when the new plant and machinery were acquired and use for less than 180 days. One time benefit extended to assesses has been earned in the year of acquisition of new plant and machinery. It has been calculated @ 15% but restricted to 50% only on account of usage of these plant & machinery in the year of acquisition. In section 32(1 (iia) the expression used is "shall be allowed". Thus the assessee had earned the benefit as soon as he had purchased the new plant and machinery in full but it is restricted to 50% in that particular year on account of period of usages. Such restrictions cannot divest the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le feed plant) of Rs. 62,548/-. The Assessing Officer was of the view that aforesaid equipments were not of the category of plant and machinery. The Assessing Officer stated that mil cans were used for collecting and storage facilities and similarly the equipment were part of laboratory testing, containers were for artificial insemination by which no production capacity was enhanced cannot be categorized as plant and machinery for the purpose of claiming additional depreciation. Therefore, additional deprecation claimed on milk cans and equipments of Rs. 40,36,716/- (37,28,661+2,45,597+62,458) was disallowed and added to the total income of the assessee. 13. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee stating that similar issue was contested in favour of the assessee by the Co-ordinate Bench of the ITAT vide ITA No. 1905/Ahd/2016 dated 9th June, 2018. The relevant part of the decision of ld. CIT(A) is reproduced as under:- "5.3. 1 have carefully considered the facts of the case, assessment order and submission of the appellant. The AO has made the disallowance of additional depreciation of Rs. 40,36,716/- on mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Therefore, we do not find any merit in this ground of appeal. It is rejected," 5.5. In view of the above and respectfully following the decision of Honourable 1TAT, the disallowance of additional depreciation made by the AO is deleted. The ground of appeal is accordingly allowed." 14. During the course of appellate proceedings before us, ld. counsel has contended that identical issue on similar facts was adjudicated in favour of the assessee by the Co-ordinate Bench of the ITAT for assessment year 2012-13 vide ITA No. 1905/Ahd/2016 dated 6th June, 2018. On the other hand, ld. counsel is fair enough not to controvert these undisputed facts that the issue has been decided in favour of the assessee by the Co-ordinate Bench of the ITAT as mentioned above. Respectfully following the decision of the Co-ordinate Bench as elaborated in the finding of ld. CIT(A), we do not find any infirmity and the same is dismissed. 15. In the result, the appeal of the revenue is dismissed. ITA No. 2402/Ahd/2018 A.Y. 2014-15 16. As the facts and issue involved in grounds of appeal vide ITA No. 2401/Ahd/2018 Assessment Year 2012-13 are similar as in ITA No. 2402/Ahd/2018 Assessment Year 2013- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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