TMI Blog2022 (3) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee by : None Revenue by : Shri S.P.Walimbe - DR ORDER Per Dr. Dipak P. Ripote, AM This is an appeal filed by the Assessee directed against the order of ld. Commissioner of Income Tax(Appeals)-9, Pune Appeal Number PN/CIT(A)6/DCIT Cir 8/355/2015-16/420 dated 24.02.2017 for the Assessment Year 2013-14. The Assessee raised following grounds of appeal: 1. The learned CIT Appeals (Appeals VI), Pune has erred in law as well as in facts while confirming the order of Ld. AO Circle 8, Pune making the addition of ₹ 85,47,488/- being the additional depreciation claimed of the assessee in relation to the assets purchased by the assessee in the year FY 2011-12 after 30.09.2011 on which only 50% of the additional depreciation was allowed in AY 2012-13 and balance 50% of the Additional Depreciation is claimed in the AY 2013-14-since in view of the decision passed by Hon ITAT bench B ITA 2789/mum/2012 the said balance 50% depreciation is allowable in the assessment year as claimed by the assessee. 2. The learned CIT (Appeals VI), Pune has erred as well as in facts while confirming the order of Ld. AO Circle 8, Pune making the addition of ₹ 2,84,917/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this transaction is ₹ 85,47,189/- as an additional expenditure of current year debited to Profit and Loss Account. unquote 4. Ground No. 1: The brief facts pertaining to Ground No. 1 are that the appellant had purchased certain assets on 30/09/2011. As per clause (iia) of sub-section 1 of Section 32 of the Act, assessee is eligible for additional depreciation in case of acquisition and installation of new machinery or plant by an Assessee after 31 March, 2005. Clause (ii) of sub-section 1 of Section 32 of the Act recognizes the depreciation on block of assets. The second proviso to clause (ii) of sub-section 1 of Section 32 of the Act, would restrict Assessee's claim of depreciation to 50% in case, the assets are acquired by the assessee during the previous year and put to use for the purposes of business or profession for a period less than 180 days in the said previous year. 4.1. The assessee had acquired the said assets on 30/09/2011 as mentioned in the assessment order. Therefore, the assessee claimed 50% of the additional depreciation in AY 2012-13 and remaining 50% in AY 2013-14(year under consideration). 5. The Assessing Officer disallowed the claim of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y an Assessee after 31 March, 2005, the Assessee being engaged in business of manufacture or production of an article or things. 6. We may also notice that the second proviso to clause (ii) of sub-section 1 of Section 32 of the Act, would restrict Assessee's claim of depreciation to 50% in case, the assets are acquired by the Assessee during the previous year and put to use for the purposes of business or profession for a period less than 180 days in the said previous year. 7. In the context of such statutory provisions, the Revenue has raised the question - whether when 50% of the additional depreciation is claimed by the Assessee in a particular Assessment Year, since the acquisition and putting in to use of the assets in the previous Year was for less than 180 days, the Assessee can claim the remaining depreciation in the subsequent Assessment Year. Such a question came up for consideration before the Division Bench of Karnataka High Court in Commissioner of Income Tax v. Rittal India Pvt. Ltd., reported in 380 ITR 423. The Court, after referring to the statutory provisions, held and observed in para 8 as under:-- 8:-The aforesaid two conditions, i.e., the undertaking acquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on allowed under Section 32(1)(iia) of the Act is a onetime benefit to encourage industrialization, and the provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting the additional allowance. We are in full agreement with such observations made by the Tribunal. In view of the aforesaid, we do not find that any interference is called for with the order of the Tribunal, or that any question of law arises in this appeal for determination by this court. After the said judgment of the Karnataka High Court in Rittal India Pvt. Ltd., (supra), legislation has also amended the statutory provisions by adding the third proviso to clause (ii) of sub-section 1 of Section 32 of the Act, which reads as under:-- Provided also that where an asset referred to in clause (iia) or the first proviso to clause (iia), as the case may be, is acquired by the assessee during the previous year and is put to use for the purposes of business for a period of less than one hundred and eighty days in that previous year, and the deduction under this sub-section in respect of such asset is restricted to fifty per cent of the amount calculate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply in relation to the assessment year 2016-17 and subsequent assessment years. 11.2:-A perusal of the extract of the memorandum relied upon would show that the legislature recognized the fact that the manner in which the Revenue chose to interpret the provision, as it stood prior to its amendment would lead to discrimination, in respect of plant and machinery, which was used for less than 180 days, as against that, which was used for 180 days or more. 11.3:-In our opinion, as indicated above, the amendment is clarificatory in nature and not prospective, as is sought to be contended by the Revenue. The memorandum cannot be read in the manner, in which, the Revenue has sought to read it, which is, that the amendment brought in would apply only prospectively. 11.4:-We are, clearly, of the view that the memorandum, which is sought to be relied upon by the Revenue, only clarifies as to how the unamended provision had to be read all along. 11.5:-In any event, in so far as the court is concerned, it has to go by the plain language of the unamended provision, and then, come to a conclusion in the matter. As alluded to above, our view, is that, upon a plain reading of the unamended pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduction to the proviso to Section 32 of the Act, it was held by the Hon'ble Madras High Court in the case of CIT Vs. Shri T.P. Textiles Pvt. Ltd., 294 ITR 483 that such proviso being clarificatory in nature and hence, would apply to pending cases, covering past period also. The matter before the Hon'ble Jurisdictional High Court pertained to assessment year 2007-08 and accordingly, it was covered by the aforesaid judicial findings. 19. That while considering the view taken by these two Hon'ble High Courts in the above referred judgments, it was held by the Hon'ble Jurisdictional High Court that there is no justification in taking any different view and hence, no question of law arose. 20. The aforesaid decision of the Hon'ble Jurisdictional High Court was also referred by the Pune Bench of the Tribunal in the case of Cummins India Limited Vs. DCIT, ITA No. 685/PUN/2017 dated 22.11.2019 wherein the Tribunal on the issue has held as follows: .................In this judgment of the Hon'ble Bombay High Court, there is reference made to the decision of the Hon'ble Karnataka High Court in the case of Commissioner of Income Tax and another Vs. Rittal Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessment order has made addition of ₹ 2,84,917/-. The relevant para is reproduced below: (iii) Issue of disallowance u/s. 14A: The assessee has made following submission. Submission of the assessee is considered. The assessee has not able to bring out the correct evidence in support of the contention as made above. I am therefore not satisfied with the claim made. Disallowance is therefore worked out as per the procedure laid down in rule 8D, working of which is provided below: 8D (i) 8D (ii) (A) Interest claimed in P L 20,503,141 (B) Investment as on 31/03/2013 13,512,492 15,64,1657 277,096 (=) A*B/C) Investment as on 31/03/2012 17,770,821 (Avg) (C) A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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