TMI Blog2022 (5) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... nd machinery, but are parts of the machinery. Once they are worn out, the machines cannot turn out the product to the business specifications and this has to be obtained only on a replacement of the tools or the dies and moulds. Further also, in assessee s own case in the subsequent years, the revenue has allowed the claim of additional depreciation on these tools etc. and thus the ground raised in the appeal is allowed. - ITA No. 5850/Del/2018 - - - Dated:- 26-4-2022 - SH. R. K. PANDA , ACCOUNTANT MEMBER AND SH. ANUBHAV SHARMA , JUDICIAL MEMBER Assessee by : Sh. Yogesh Jain , CA and Sh. Sahil Bhalla , CA Revenue by : Sh. Atiq Ahmad , Sr. DR ORDER PER ANUBHAV SHARMA , JM : The appeal has been filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(iia) and therefore, is entitled to additional depreciation. 3.1 However, the Ld. AO at page 5 of the assessment order has held as under : The intention of the section is to give incentive to the new entrepreneurs to set up new manufacturing establishments. The language of the section 'In the case of any new machinery or plant which has been acquired and installed after the 31st day of march, 2005 intends set up of new plant and not moulds and dies addition / renovation or repair to the old plant. Further, the assessee has made addition of tools which cannot be treated as installation of plant and machinery . 3.2 The assessee went in appeal before CIT(A) raising grounds that certain amendments were made regarding additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aircraft) acquired and installed after March 31, 2005 by an assessee who is engaged in the business of manufacture or production of any article or thing - additional depreciation under Income Tax Act of 20% of actual cost shall be allowed. Further, from A.Y. 2013-14 the same is also allowed to assessee engaged in the business of generation or generation and distribution of power, where the depreciation is provided on WDV method as per Appendix I. Further, from assessment year 2017-18 the same is also allowed to the assessee engaged in the business of transmission of power. Further, where the asset is used for less than 180 days then 50% depreciation i.e, 1/2 of 20% (i.e.10%) is available (Balance 50% of Additional Depreciation can be claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets, acquired during the year, amounting to Rs. 61,12,773/-, has been treated by the appellant as new plant and machinery, on which additional depreciation has been claimed. However, I am unable to accept the contention of the appellant's AR. The acquisition of new tools, can, by no stretch of imagination be held as equivalent to acquisition of new plant and machinery. The tools are acquired so as to enhance the life of an existing plant and machinery. Whenever a new plant and machinery is acquired, any tools which are integral and inseparable part of such new plant and machinery are certainly eligible for additional depreciation. However, acquisition of tools for an existing plant and machinery do not qualify for additional d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tempo Ltd. vs. Commissioner of Income Tax , 62 Taxman 480 (SC). 5.2 It was also submitted that in the appellant s own case for the assessment year 2014-15 and 2015-16 and 2016-17 the additional depreciation claimed has been allowed By CIT(A). 5.3 The ld. DR submitted that the ld. Tax Authorities below have passed reasoned orders with which he stands by. 6 Appreciating the matter on record and contentions of counsel it can be observed that Hon ble Supreme Court of India in Scientific Engineering House (P) Ltd. case has relied the following functional test as laid by House of Lords in IRC v. Barclay, Curie Co. Ltd. [1970] 76 ITR 62 : ..In order to decide whether a particular subject is an apparatus it seems obvious that an e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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