TMI Blog2019 (2) TMI 1901X X X X Extracts X X X X X X X X Extracts X X X X ..... plant in the year in which it had been acquired and installed and could not be spilled over to the subsequent years, thus declined to allow the additional claim of depreciation @ 10% - HELD THAT:- There is no restriction made available 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 view is fortified by the judgment of CIT, Madurai , Vs. T.P. Textiles (P) Ltd [ 2017 (3) TMI 739 - MADRAS HIGH COURT] and Rittal India Pvt. ltd. [ 2016 (1) TMI 81 - KARNATAKA HIGH COURT] . We thus being of the considered view that no infirmity arises from the order of the CIT(A) who had rightly deleted the disallowance of additional depreciation. Bad debts claim - assessee sought adjudication on its claim of bad debt on the basis of the facts which were already available on record - HELD THAT:- As per the settled position of law as, we are of the considered view that no infirmity does emerge from the order of the CIT(A) who had directed the A.O to consider the said claim in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/ s 14A of the Act without appreciating the fact that the issue stands squarely covered by the decision of the Hon‟ble ITAT D‟ bench in the case of ITO vs. RBK Share Broking Pvt. Ltd. - 37 taxman 128(2013) and the decision of the Hon‟ble ITAT 'F' Bench in the case of D.C.I.T. Cen. Cir. 18 19, Mumbai vs. Viraj Profiles Ltd. (2015) 64 taxmann.com 52 (Mumbai - Trib.)/2016, 156 ITD 72 (Mumbai - Trib) wherein it is clear that the provisions of section 14A r. w. r. 8D is applicable for computation of book profit u/s 115JB of the Act. 4. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the additional depreciation is allowable on the assets put to use in earlier year without appreciating that the that additional depreciation is allowable under section 32(1)(iia) of the Income Tax Act 1961, only in respect of assessment year in which the new machinery was acquired and installed and not thereafter. The appellant craves leave to amend or alter any ground or add a new ground of which may be necessary. 2. Briefly stated, the assessee company which is engaged in the business of manufacturing and sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or a period of less than 180 days, therefore, as against its entitlement for claim of additional depreciation @ 20% the assessee had claimed the additional depreciation on the said machinery @10%. Further, the balance additional depreciation of 10% was claimed by the assessee during the year under consideration i.e A.Y 2012-13. It was observed by the CIT(A) that the A.O being of the view that the additional depreciation could only be claimed by the assessee in the year in which the new machinery is first put to use, thus declined the claim of the assessee towards additional depreciation during the year. The CIT(A) observed that the issue before him was covered by the order of the ITAT, Mumbai in the case of Indian Writing Instruments Pvt. Ltd. (ITA No. 6509/Mum/2012; dated 19.03.2014) and the orders of the ITAT, Delhi in the case of DCIT Vs. Cosmo Films Ltd. 139 ITD 628 (Del) and ACIT Vs. SIL Investment Ltd. [54 SOT 54 (Del)], thus followed the view therein taken and concluded that the assessee was entitled for additional claim of depreciation under Sec.32(1)(iia) during the year under consideration. On the basis of the aforesaid deliberations the appeal of the assessee was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,81,485/- which was offered by the assessee in its return of income had made an addition/disallowance of the balance amount of ₹ 19,51,247/-. We find that it was the claim of the assessee before the CIT(A) that as its dividend income during the year under consideration amounted to ₹ 5,000/-, hence the disallowance under Sec. 14A be restricted to the said amount. However, the CIT(A) after necessary deliberations restricted the disallowance under Sec. 14A to the amount of Rs, 1,81,485/- that was offered by the assessee in its return of income. We are of the considered view that the disallowance under Sec.14A in respect of the expenses incurred for earning of the exempt income cannot exceed the amount of the exempt income itself. Our aforesaid view is fortified by the judgments of the Hon ble High Court of Delhi in the case of Joint Investments Pvt. Ltd. Vs. CIT (2015) 372 ITR 694 (Del) and Cheminvest Limited Vs. Commissioner of Income Tax (2015) 378 ITR 33 (Del). However, as the assessee itself had offered a disallowance of ₹ 1,81,485/- under Sec.14A, therefore, the CIT(A) had in all fairness restricted the disallowance upto the said amount. We thus not f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear i.e A.Y 2011-12, therefore, the assessee had claimed additional depreciation @10% during the year under consideration and had claimed the balance additional depreciation @ 10% during the year under consideration i. A.Y 2012-13. The A.O being of the view that as per the provisions of Sec.32(1)(iia) of the I.T. Act the additional depreciation was to be allowed @ 20% of the actual cost of machinery of plant in the year in which it had been acquired and installed and could not be spilled over to the subsequent years, thus declined to allow the additional claim of depreciation @ 10% amounting to ₹ 1,36,32,835/- that was raised by the assessee during the year under consideration. The claim of the assessee before the A.O that as the assessee had put to use the machinery for less than 180 days during the preceding year i.e. A.Y. 2011-12, hence the depreciation on the same was claimed partly in the said previous year and partly during the year under consideration, did not find favour with the A.O. The A.O held a strong conviction that if the new plant and machinery is put to use for a period of 180 days in the year in which it was acquired then the entitlement of the assessee towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture or production of any article or thing or generation or generation and distribution o, power, a further sum equal to twenty per cent of the actual cost of such machinery or plant sha1jb 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 business. 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Broking Pvt. Ltd. - 37 taxman 128(20 13) and the decision of the Hon‟ble ITAT F‟ Bench in the case of D.C.I.T. Cen. Cir. 18 19, Mumbai Vs. Viraj Profiles Ltd. (2015) 64 taxmann.com 52 (Mumbai - Trib.)/2016, 156 ITD 72 (Mumbai Trib.) wherein it is clear that the provisions of section 14A r. w. r. 8D is applicable for computation of book profit u/s 115JB of the Act. 4. Whether on the facts and circumstances of the case the Ld CIT(A) has erred in holding that the additional depreciation is allowable on the assets put to use in earlier year without appreciating that the that additional depreciation is allowable under section 32(1)(iia) of the Income Tax Act, 1961 only in respect of assessment year in which the new machinery was acquired and installed and not thereafter. 5. Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in directing the AO to consider the second revised claim pertaining to bad debts amounting to ₹ 544.20 Lakhs made by the assessee on 07.03.2016 when in fact the claim was made beyond the period stated u/s 139(5) and was only by way of a letter detailing revised computation. 6. Whether on the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the immediately preceding year i.e. A.Y. 2012-13 viz. ITA No. 7290/Mum/2017. Insofar, the direction of the CIT(A) to the A.O to consider the second revised claim pertaining to bad debts amounting to ₹ 544.20 lacs that was raised by the assessee in the course of the assessment proceedings was concerned, it was submitted by the ld. D.R that as the assessee had not raised any such claim in its return of income, hence, the CIT(A) had erred in directing the A.O to consider the said claim of the assessee. In support of his contention the ld. D.R relied on the judgment of the Hon ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC). Apart therefrom, the ld. D.R also took support of the CBDT Circular No. 516, dated 15.06.1988. It was submitted by the ld. D.R that in the aforesaid CBDT Circular No.516 it was provided that the income of an assessee cannot be assessed at a figure lower than the returned income. In sum and substance, it was the contention of the ld. D.R that in case if the aforesaid fresh claim raised by the assessee is admitted then the same would result to its income being assessed at a figure lower substantially lower than the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid observations. 18. As regards the ground of appeal No. 4 raised by the revenue before us, we find that as the issue involved has been adjudicated by us while disposing off the ground of appeal No. 4 in the appeal of the assessee for A.Y. 2012-13, thus our order passed while disposing of the ground of appeal No. 4 in the appeal of the assessee for A.Y. 201213 shall apply mutatis mutandis for disposing off the ground of appeal No. 4 for the year under consideration. The Ground of appeal No. 4 is dismissed in terms of our aforesaid observations. 19. We shall now advert to the contention of the revenue that the CIT(A) had erred in directing the A.O to consider the second revised claim pertaining to bad debt amounting to ₹ 544.20 lacs that was raised by the assessee in the course of the assessment proceedings before him. Admittedly, the assessee had in the course of the assessment proceedings vide a letter dated 07.03.2016 had raised a fresh claim for deduction of bad debts ₹ 544.20 lacs. However, the A.O being of the view that it was not permissible for an assessee to raise a claim which was not made in the return of income, except by way of filing a revi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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