TMI Blog2021 (1) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... MEDABAD] 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 statutory right, Law docs not prohibit that balance 50% will not be allowed in 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 usag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2016 and total income was assessed at ₹ 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 ₹ 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 ₹ 7,91,89,690/- and also borrowed funds to the amount of ₹ 185.81 crores as on 31st March, 2013 and claimed total interest expenses of ₹ 48,00,48,638/- in the Profit and Loss Account. The Assessing Officer further noticed that assessee has claimed exempted interest of ₹ 47,29,522/- and dividend income of ₹ 1,85,55,250/- totaling to ₹ 2,32,84,772/- u/s. 80P(2)(d) of the act. On query, the assessee explained that it has received interest income from investment out of the amount received on accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted 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 of Coordinate Bench of the ITAT in assessee s own case vide ITA No. 2613/Ahd/2012 for assessment year 2009-10 as follows:- 11. After hearing both the parties and perusing the record, we find that AO while disallowing the 50% of expenditure claimed by the assessee was of the view that interest expenses incurred by the assessee on borrowed funds might have been use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance on additional deprecation of ₹ 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 ₹ 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 assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee holding that the assessee s case is covered by the decision given in assessee s own case by the Coordinate Bench of the ITAT Ahmedabad vide ITA no. 1905/Ahd/2016 dated 6th June, 2018. The relevant part of the decision of ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue. 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 cost of new machinery and plant acquired and installed. This provision has been directed to the setting up new industrial undertaking making or for expansion of the industrial undertaking by way of making more investment in capital goods. Thus, these are incentives aimed to boost new investments in setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional 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 statutory right, Law docs not prohibit that balance 50% will not be allowed in 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 incent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 ₹ 40,36,716/- on milk cans, Rs,2,45,597/-claimed on equipments and ₹ 62,458/- claimed on equipments (Cattle Feed Plant) stating that the equipments which are part of laboratory testing, containers for Artificial Insemination by which no production capacity is enhanced cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 2013-14 therefore after applying the decision adjudicated vide ITA No. 2401/Ahd/2015 as supra in this order, this appeal of the revenue stands dismissed. Cross Objection No. 136/Ahd/2019 A.Y. 2013-14 17. The assesse has filed cros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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