TMI Blog2021 (6) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore no disallowance would have been made u/s 40 a (ia) of the act. So we confirm the order of the ld CIT (A) . In view of this ground number (1) of the appeal is dismissed. Disallowance of additional depreciation u/s 32 (1) (iia) - assessee has claimed the additional depreciation on the plant and machinery purchased for the power generation plant - HELD THAT:- AO was of the view that the benefit is available only to those undertaking which are engaged in the business of manufacture or production of any article of thing. Generation of power according to him cannot be equated with the production of any article or thing. Further clause ii(a) , subsection (1) of Section 32 of the act was amended with effect from 1 April 2013 and therefore such additional depreciation could be allowed only with effect from 1 April 2013, thus the same was disallowed. Assessee challenged the same before the learned CIT A who allowed the claim of the assessee relying on the decision of the coordinate bench in case of NTPC versus Deputy Commissioner Of Income Tax [ 2012 (5) TMI 127 - ITAT DELHI] where the coordinate bench after considering the several decisions including the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rice that such goods or services would ordinarily fetch in the open market. Naturally, the taxes and duties are not at all fetched by such goods or services but are the levies of the government on transfer of such goods. The price of such goods can never include the government levy. This is the argument of the learned departmental representative. However when an issue has been decided by higher forum, we are duty-bound to follow the same, as judicial discipline demands, more particularly when in assessee‟s own case on identical facts and circumstances the issue was decided. It is apparent that this issue was raised by the learned assessing officer in assessment year 2009 10 and the coordinate bench after discussing this issue at length has taken a view in favour of the assessee.Therefore respectfully following the decision of the honourable Delhi High Court in assessee own case for assessment year 2009 10, we confirm the order of the ld CIT (A) and ground number 4 the appeal of the learned AO is dismissed. Disallowance of depreciation while calculating the profit 115JB - HELD THAT:- AO has not discussed this issue at all in the assessment order and merely added ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the disallowance of ₹ 6,85,662/- on account of additional depreciation claimed u/s 32 (l)(iia) of the Act without considering the fact that the relevant provisions are affected w.e.f. 01.04.2013? 3. Whether on facts and in circumstances of the case, the Ld CIT(A) is legally justified in deleting disallowance of ₹ 62,96,880/- on account of excess depreciation claimed on electrical installations by holding that electrical fittings which are the part of block of'furniture and fittings' as perNew Appendix I of Income Tax Rule, 1962 (the Rule) as plant by ignoring amended sub-section (3) of Section 43 of the Income Tax Act, 1961 (the Act)? 4. Whether on facts and in circumstances of the case, the Ld CIT(A) is legally justified in deleting disallowance of ₹ 6,87,99,634/- on account of excess deduction claimed u/s 80IA(8) of the Act without considering the facts recorded by the AO in assessment order and without recording his clear findings regarding allowing relief to the assessee in appellate order? 5. Whether on facts and in circumstances of the case, the Ld. CIT (A) is legally justified in deleting the addition of ₹ 69,89,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer aggrieved with that is in appeal before us per ground number (1) of the appeal. 5. The learned departmental representative vehemently submitted that when the notification itself is applicable from 1 January 2013, it does not apply to the current year, and therefore learned CIT A has erred in applying the same for the impugned assessment year. It was further stated that the bank guarantee charges are covered u/s 194H of the act. The learned departmental representative supported the order of the AO and he submitted a chart relying upon the several decisions of the coordinate benches on this issue. 6. We have carefully considered the rival contention and find that the assessee has paid guarantee commission charges of state bank of India for giving guarantee in favour of the seller of coal to the assessee. It is one of the banking services provided by the state bank of India to the assessee. It cannot be said to be a commission as intended to u/s 194H of the but it is in the nature of Bank charges charged by the bank for provision of services to the assessee. Now this issue has been decided by the honourable Bombay High Court in case of CIT TDS (1), Bombay versus La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal depreciation on the plant and machinery purchased for the power generation plant. The learned AO was of the view that the benefit is available only to those undertaking which are engaged in the business of manufacture or production of any article of thing. Generation of power according to him cannot be equated with the production of any article or thing. Further clause ii(a) , subsection (1) of Section 32 of the act was amended with effect from 1 April 2013 and therefore such additional depreciation could be allowed only with effect from 1 April 2013, thus the same was disallowed. Assessee challenged the same before the learned CIT A who allowed the claim of the assessee relying on the decision of the coordinate bench in case of NTPC versus Deputy Commissioner Of Income Tax (2012 TIOL 258 ITAT Del] where the coordinate bench after considering the several decisions including the decision of the honourable Supreme Court in case of impunity board wherein it was held that the electricity is a goods allowed the claim of the assessee. Therefore, now the learned assessing officer is in appeal before us. 9. The learned departmental representative supported the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as for claim of additional depreciation. It has been held by the coordinate bench of the tribunal that even prior to the amendment made by the finance act, 2012, the assessee is engaged in generation of generation or distribution of electricity were held to be eligible for additional depreciation. It was accordingly held that the assessee is entitled to additional depreciation on the power plant and the venerable installed during the year. In view of the above, we hold that the assessee is entitled to additional depreciation on account of production/generation of power. The grounds raised by the assessee on this issue are accordingly allowed. 11. Therefore respectfully following the decision of the coordinate bench in assessee‟s own case we do not find any infirmity in the order of the learned CIT A in deleting the disallowance of additional depreciation of ₹ 685,662/ . So we confirm the order of the ld CIT (A) . Accordingly, ground number 2 of the appeal of the AO is dismissed. 12. The ground number (3) is with respect to the deletion of the disallowance of ₹ 6,296,880 on account of excess depreciation claimed on electrical installations by holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, which provides that electrical fittings include electrical wiring, switches, sockets, other fittings and Fans , etc.‟ During the year, assessee has installed certain electrical installations and claimed depreciation on the same by applying the depreciation rate of 15% on its written down value considering it as plant Machinery . The claim of the assessee is that electrical installation is plant and machinery, as it is required for functioning of the plant and machinery connected to electrical base. The assessee‟s claim is also that it is not an electrical fitting such as wiring, switches, sockets, and other fittings. The claim of the assessee is also that to run the plant and machinery this electrical installation is necessary. The claim of the assessing officer is that the electrical installation are covered in electrical fittings and therefore the depreciation rate applicable to such assets is only 10% as provided for furniture and fittings. We find that identical issue is decided in case of assessee by coordinate bench for assessment year 2010 11 in ITA number 5199/Del/2014 dated 15/1/2019 wherein it has been held that in case of electrical fittings the depr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and giving a proper opportunity of hearing to the assessee, the issue may be decided whether the electrical installations are furniture and fittings or plant and machinery. Thus, Ground no 3 is allowed with above directions. 16. The ground number 4 is with respect to the deletion of disallowance of ₹ 68,799,634/ on account of excess deduction claimed u/s 80 IA (8) of the act. The brief facts shows that assessee is engaged in generation of power and the power so generated is transferred to other units of the assessee captively at the rate at which it is obliged to purchase from the state electricity board. The assessee furnished the details that assessee has made a sale of ₹ 808,395,710/ from the power plant and the profit derived from that industrial undertaking was determined at ₹ 24,40,77,237/ against which the deduction u/s 80 IA has been claimed at the rate of hundred percent. The assessee during the course of the assessment proceeding furnished that the rate at which the sale of the power has been considered to other units is ₹ 4.23 per unit, the rate at which CSEB was selling to industrial consumers. It was further stated that the power rate ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further held that argument of the ld AO that the impugned government levies cannot be included since such levies are not payable by captive power units of the appellant is not sustainable legally because while determining the market price composition of the price in the hands of the supplier of power is not relevant since purchaseor/consumer is not concerned with the composition of the price but it is in the hands of buyer needs to be seen. He therefore restored the original deduction claimed by the assessee. Therefore, the learned assessing officer is in appeal before us by this ground. 17. The learned departmental representative vehemently supported the order of the learned assessing officer and stated that the market price of the power cannot be determined by including the government levies, which have never been paid by the assessee. It was further contested that the market price must be seen excluding the levies and not including the government levies, which are not payable. The learned departmental representative also raised a contention that it is a double loss to exchequer in the form that neither this duty and cess is paid by the assessee but assessee is claiming incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... departmental representative. However when an issue has been decided by higher forum, we are duty-bound to follow the same, as judicial discipline demands, more particularly when in assessee‟s own case on identical facts and circumstances the issue was decided. It is apparent that this issue was raised by the learned assessing officer in assessment year 2009 10 and the coordinate bench after discussing this issue at length has taken a view in favour of the assessee in ITA number 4449/Del/2010 vide order dated 24/4/2018. Against this order, the revenue preferred an appeal before the honourable High Court raising the very same issue. The honourable Delhi High Court in ITA number 211/2019 dated 6/3/ 2019 has held as Under:- ITA 211/2019 The following additional question of law arises in this appeal:- 1. Whether the ITAT erred in holding that the write-off in respect of advances given to M/s Bear Logistics LLC to the tune of [₹ 3.89 crores] was justified having regard to the decision of the Supreme Court in Southern Technologies Ltd. vs. Joint CIT (2010) 320 ITR 577 (SC)? The third question urged in ITA 211/2019 is with respect to the inclusion of local taxes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed decision of his predecessor and also decision of the honourable Supreme Court in Appollo Tyres limited 255 ITR 273 , deleted the above addition. The learned assessing officer aggrieved has challenged the same as per ground number 5 of the appeal. 22. The learned departmental representative relied upon the order of the learned assessing officer. 23. The learned authorised representative submitted that the learned CIT A has followed the decision of the honourable Supreme Court in Apollo tyres and further similar additions made by the learned assessing officer in assessee‟s own case for earlier years are deleted by the coordinate bench. He referred to the decision of the coordinate bench in ITA number 4449/del/2010 dated 24/4/2018 for assessment year 2006 07 to 2009 10. 24. We have carefully considered the rival contentions and perused the order of the learned assessing officer as well as the learned CIT A. The learned assessing officer has not discussed this issue at all in the assessment order and merely added back same while computing the book profit in the assessment order. As the issue is squarely covered in favour of the assessee by the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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