TMI Blog2021 (1) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. Therefore, this ground of appeal of the assessee is allowed. Disallowance of additional depreciation claimed by assessee u/s 32(1)(iia) - Asset put to use - HELD THAT:- We find that as per second proviso to Sec. 32(1) the entitlement of an assessee towards claim of depreciation in a case where a new machinery or plant acquired during the previous year is put to use for a period of less than 180 days in that previous year shall be restricted to 50% for the percentage prescribed for the said asset under clause (iia) of Sec. 32(1) of the I.T. Act. However, there is nothing available in the statute from where it can be gathered that the assessee would be disentitled for claiming the balance 50% of the additional depreciation i.e.10% in the succeeding year - there is no restriction made avai1able on the statute as per which the assessee who had put to use the new machinery for a period of less than 180 days during a year, would be divested of its entitlement to claim the balance 10% of the additional depreciation in the succeeding assessment year. Our aforesaid views is fortified by the judgment of the Hon'ble High Court of Hon ble Madras High Court in the case of CIT, M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en where taxpayer in a particular year has not earned any exempt income? 3. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the Assessing Officer made disallowance under section 14A of the Act r.w.r 8D(2)(iii) at ₹ 29.01 lakh as against disallowance computed by assessee at ₹ 22,000/-. 4. Aggrieved, the assessee preferred appeal before the CIT(A) who restricted the disallowance at ₹ 3,000/- only, by following the decision of Hon ble Supreme Court in the case of Maxopp Investment Ltd. Vs. CIT (2018) 402 ITR 640 (SC) by observing in para-3.1.4 as under: 3.1.4 In view of the above detailed discussion of Hon'ble se order in Maxopp Investments Ltd, it is held here that it is not a fit case for invoking provisions of section 14A as the appellant has earned exempt income of ₹ 3,000/- only. Further, against this small exempt income, it has already disallowed an amount of ₹ 22,000/- So, there is no scope for any further disallowance. In view of this established judicial position, the disallowance made of ₹ 3.9,01,000/- made u/s 14A in this case is hereby deleted. Since the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of this established judicial position, the disallowance made of ₹ 3.9,01,000/- made u/s 14A in this case is hereby deleted. Since the addition does not survive in the normal provisions themselves, there is no question of their applicability u/s 115JB for MAT purposes. The same addition is also considered as deemed to have been deleted without going into the merits of the legality of whether section 14A is applicable to MAT provisions or not. These grounds are allowed. 8. We noted that this issue is even covered by the special bench of this Tribunal in the case of Vireet Investment Pvt. Ltd. (ITA No. 502/Del/2012 CO No. 68/Del/2012; dated. 16.06.2017 (SB) wherein its observed as under: 6.22. In view of above discussion, we answer the question referred to us in favour of assessee by holding that the computation under clause (f) of Explanation 1 to Section 115JB(2), is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D of the Income Tax Rules, 1962 . 9. In view of the above position, the issue is covered by the decision of Special bench of this Tribunal in the case of Vireet Investment Pvt. Ltd. (supra). Hence, respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business or profession for a period of less than one hundred and eighty days In that previous Year, the deduction under this sub-section in respect of such asset shall be restricted to fifty per cent of the amount calculated at the percentage prescribed for an asset under clause (i) or clause (ii) or clause (iia), as the case may be: Provided also Explanation 1 to Explanation 5.. (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 or generation or generation and distribution of power, 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). Admittedly, the purpose of affording benefit to an assessee by way of additional depreciation under Sec.32(1)(iia) was backed with an intent to encourage industrialization i.e. either by setting up a new industrial unit or by expanding a new industrial unit by purchasing and installing new machinery or plant and putting the same to use for the purpose of busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Social Responsibility referred to in section 135 of the Companies Act, 2013 shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession? 14. At the outset, the ld. counsel for the assessee stated that the CIT(A) has already set-aside the issue back to the file of Assessing Officer by holding that these expenses incurred under the head Corporate Social Responsibility Expenditure wrongly claimed by assessee are actually payments made for advertisement on account of business promotion and logo on Premier Ltd. The CIT(A) has directed the Assessing Officer to verify and the relevant finding of CIT(A) reads as under: In find that the expenses incurred by the appellant are of the nature of advertisement expenses which are incurred for the purpose of business, hence, allowable u/s 37(1) of the Act. However, the AO is directed to verify the expenses with reference to the programmes conducted at Natya- Mahotsava etc, and allow the same, if fond to be correct. This ground is therefore allowed. 15. We noted that the CIT(A) has already restored the matter back to the file of Assessing Officer for fresh consideration. Hence, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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