TMI Blog2022 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... ses and since there is no provision exists in the Income Tax Act to allow the expenses which are expended for non-business purposes, ao disallowed the same - HELD THAT:- Respectfully following the above decision of the Tribunal assessee s own case for the assessment year 2011-12 [ 2016 (10) TMI 522 - ITAT CHENNAI] CIT(A) has rightly directed the Assessing Officer to delete the addition - Thus, we find no infirmity in the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the Revenue is dismissed. Disallowance of depreciation claimed u/s 32 - AO asked the assessee as to why the depreciation claimed at the rate of 80% should not be restricted to 15% since it will come under the category (xii) Renewable Energy devices being windmills and any specially designed device which run on windmills - HELD THAT:- As on perusal of the assessment order or appellate order, it is not clear as to whether the said windmills and any specially designed devices which run on windmills are installed on or before 31.03.2012 or on or after 01.04.2012. Accordingly, we direct the Assessing Officer to verify as to whether the windmills are installed on or before 31.03.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, we set aside the order of the ld. CIT(A) on this issue and direct the Assessing Officer to allow deduction of license fee as claimed by the assessee. Thus, the ground raised by the assessee is allowed. - I.T.A. No.476/Chny/2020 And I.T.A. No.570/Chny/2021 - - - Dated:- 15-7-2022 - Shri V. Durga Rao, Judicial Member And Shri G. Manjunatha, Accountant Member For the Department : Shri R. Venkateswara Reddy, CIT For the Assessee : Shri B. Ramakrishnan, FCA ORDER PER V. DURGA RAO, JUDICIAL MEMBER: Both the cross appeals filed by the Revenue and the assessee are directed against the order of the ld. Commissioner of Income Tax (Appeals) 3, Chennai, dated 16.12.2019 for the assessment year 2014- 15. The Department has raised the following grounds: 1. The order of the Ld. Commissioner of Income Tax(Appeals) is contrary to the law and the facts of the case. 2.1 The Ld. CIT(A) has erred in holding that the VAT subsidy received is capital in nature following decision in Shree Balaji Alloys Vs CIT(J K) 198 Taxmann 122 ignoring the fact that the apex court has dismissed the appeal of the revenue without adjudicating on merits. 2.2 The Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, perused the materials available on record and gone through the orders of authorities below including paper book filed by the assessee. Similar issue was subject matter in appeal before the Tribunal in assessee s own case for the assessment year 2011-12 in I.T.A. No. 766/Mds/2016 vide order dated 17.08.2016, wherein, the Tribunal has observed and held as under: 6.5 We heard the rival submissions, perused the material on record and judicial decisions cited. The only contention of the ld. Authorised Representative that VAT subsidy is in the nature of capital receipt and not Revenue in nature and relied on the legal decisions. The ld. Authorised Representative drew our attention to the order of the ld. Assessing Officer and findings of the DRP where assessee claimed subsidy as Capital receipt. In the course of hearing, the ld. Authorised Representative drew our attention to the page no. 77 of the paper book filed Government Order dated 01.11.2007 issued to the assessee company to setup Wind Electric Generators Manufacturing Unit in the state with a investment of =500 crores and also on request of the assessee company for 100% VAT reimbursement for ten years, Government has cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer disallowed the same and brought to tax. On appeal, by following the decision of the Coordinate Benches of the Tribunal in assessee s own case for the assessment year 2011-12, the ld. CIT(A) has directed the Assessing Officer to delete the addition. 5. We have heard the rival contentions. Similar issue on identical facts was disputed in assessee s own case for the assessment year 2011-12, wherein, the Coordinate Benches of the Tribunal has observed and held as under: 5.5 We heard the rival submissions, perused the material on records and judicial decisions. The expenditure incurred towards corporate social responsibility by the assessee company is Revenue in nature and the objects for which it is offered is for social cause and amendment to Sec. 37(1) of the Act inserted with Finance Act, 2014 is subsequent to assessment year. Therefore, the same is not applicable and assessee company relied the judicial decision of CIT vs. Madras Refineries Ltd 313 ITR 334. Considering the apparent facts, we are of the opinion that the expenditure is for a specific cause for the benefit of society was not disputed by the Revenue on genuineness. So, we direct the ld. Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. The deponent had revisited the issue and decided to now file the appeal with a delay, due to the unavoidable reasons as mentioned above. e. Subsequently, the order of CIT(A) was forwarded to M/s. CNGSN Associates LLP, Chartered Accountants to file appeal before the Hon'ble ITAT and the same is now being filed on 07.12.2021 with a delay of 662 days. 4. It is most humbly and respectfully submitted that the delay in filing appeal was not willful and was due to circumstances was not in control of the deponent as stated above. 5. The Deponent relies on the decision of Supreme Court in Collector, Land Acquisition v. Mst. Katiji in [1987] 1987 taxmann.com 1072 (SC) wherein it was held that Ordinarily, a litigant does not stand to benefit by lodging an appeal late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated as against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. 6. Considering the above, the Deponent most respectfully and humbly prays before this Hon'ble Tribunal to kindly admit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has claimed depreciation at the rate of 80% on the newly added plant machinery. However, the Assessing Officer restricted the claim of depreciation at 15% on the ground that the same will come under the category (xii) Renewable Energy devices being windmills and any specially designed device which run on windmills , which was confirmed by the ld. CIT(A). The stand of the assessee is that as per the Appendix-I of Rule 5 of the IT Rules, 1962, in Sl. No. Part A, III 8(xiii) Clause (L) wind mills and any specially designed devices which run on wind mills and Clause (R) Machinery and Plant used in the manufacture of any of the above sub are allowed depreciation at 80%. 7.2 The rates for claiming depreciation under the Income Tax Act for various block of assets is specified under Rule 5 of Income Tax Rules, 1962, read with New Appendix-I of the Rules. As per said New Appendix-I, rate of depreciation for windmill are specifically given in Part A, as per which windmills and any specially designed devices which run on windmills are eligible for depreciation @ 80%. This was further clarified by CBDT vide its Notification No.15/2012 dated 30.03.2012, as per which, windmil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence in support of the claim of additional depreciation on plant and machinery for the assessment year under consideration. 8.1 We have heard the rival contentions. The assessee has claimed additional depreciation of Rs. 3,01,17,327/-. The Assessing Officer has called for copies of invoices of the additions made. Most of the invoices produced by the assessee were pertaining to earlier years and not to the assessment year under consideration. When asked about the mismatch of invoices, the assessee has submitted that the assets were purchased in earlier year and were kept in WIP and capitalized during the assessment year under consideration. However, the assessee could not furnish the details of capitalization/work in progress of earlier years or any credible evidence in support of the claim of additional depreciation on plant and machinery for the assessment year under consideration. Accordingly, the Assessing Officer disallowed the claim of additional depreciation for want of evidence. On appeal, since the assessee failed to furnish any material evidence in support of its claim, the ld. CIT(A) confirmed the disallowance made by the Assessing Officer. Even before the Tribunal, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s own case for the assessment year 2012-13, wherein, the Tribunal has observed and held as under: We have heard the rival submissions and perused the material on record. License fee were paid to the licensors towards use of technical knowhow for manufacturing wind energy generators. From the perusal of clauses of the technical collaboration agreement entered by the appellant and M/s Vensys AG, Germany and Wind Direct GmbH, Germany, it is clear that appellant was granted non exclusive nor transferable right to use the technical knowhow for the period of twenty years and the appellant cannot use the technical knowhow in event of termination of the agreement or on the expiry of period of twenty years. In the background of this fact, we need to decide the issue whether the expenditure of license fee is capital or revenue in nature. Fundamental test to determine whether the technical knowhow has been licensed or assigned is to see whether licensor had retained any rights in the technical knowhow. If the rights are retained by the licensor then it is a case of assignment. Therefore license is nothing but right to use the technical knowhow which can be revoked any time. Recently, Hon& ..... X X X X Extracts X X X X X X X X Extracts X X X X
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