DCIT Corporate Circle 2(1), CHENNAI V. Fresh and Honest Cafe Ltd., CHENNAI

ITA 1021/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4414 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 26-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N ARJUN RAJ
• Keywords: Depreciation; Additional depreciation; Unabsorbed depreciation; Set aside
• Section: 32(1)(iia); 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , . , ! BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER , AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1021/CHNY/2018 /ASSESSMENT YEAR: 2014-15 THE DY. COMMISSIONER OF- INCOME TAX, CORPORATE CIRCLE-2(1), ROOM NO.511, 5 TH FLOOR, WANAPARTHY BLOCK, 121 M.G.ROAD, CHENNAI-600 034. VS. M/S.FRESH AND HONEST- CAF LTD., NO.35(SP), 3 RD FLOOR, THIRUVIKA INDUSTRIAL ESTATE, HALL MARK TOWER, GUINDY, CHENNAI-600 032. [PAN: AAACF 1516 H ] ( % /APPELLANT) ( &'% /RESPONDENT) DEPARTMENT BY : MR.CLEMENT RAMESH KUMAR, ADDL. CIT ASSESSEE BY : MR.N. ARJUN RAJ, CA ) /DATE OF HEARING : 19.03.2019 ) /DATE OF PRONOUNCEMENT : 19.03.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-6, CHENNAI, IN ITA NO.400/CIT(A)- 6/2016-17 DATED 26.12.2017 FOR THE AY 2014-15. 2. MR. CLEMENT RAMESH KUMAR, ADDL.CIT REPRESENTED O N BEHALF OF THE REVENUE AND MR. N.ARJUN RAJ, CA, REPRESENTED ON BEH ALF OF THE ASSESSEE. ITA NO.1021/CHNY/2018 :- 2 -: 3. IN THE REVENUES APPEAL, THE REVENUE RAISED THE FOLLOWING GROUNDS: I .THE ORDER OF THE LEARNED COMMISSIONER OF INCOME T AX (APPEALS) IS CONTRARY TO THE LAW AND FACTS OF THE CASE. 2.1. THE CIT(A) ERRED IN HOLDING THAT ADDITIONAL DEP RECIATION CAN BE ALLOWED IN THE NEXT YEAR IN CASE THE SAME CANNOT BE ALLOWED IN THE EARL IER YEAR. 2.2. THE CIT(A) ERRED IN IGNORING THE JURISDICTIONAL HIGH COURTS DECISION IN THE CASE OF MM FORGINGS LTD? 2.3. THE CIT(A) ERRED IN IGNORING THE SECOND PROVISI ON OF SECTION 32(1) WHEN THERE ARE NO PROVISIONS IN THE STATUTE TO CARRY FORWARD THE BALA NCE ADDITIONAL DEPRECIATION TO THE FOLLOWING YEARS. 3.FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED A T THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. AT THE TIME OF HEARING, IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUES IN THIS APPEAL ARE SQUARELY COVERED BY THE D ECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES O WN CASE FOR THE AY 2012-13 IN ITA NO.1373/MDS/2016 DATED 10.08.2016, W HEREIN, THE CO- ORDINATE BENCH OF THIS TRIBUNAL HAS HELD AS FOLLOWS : 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WITH REGARD TO THE CLA IM OF ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT, WE HAVE PERUSED THE OR DER OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN I.T.A. NOS. 1499 & 1500/MDS/2014 & 1485/MDS/2015 FOR THE ASSESSMENT YEARS 2009-10, 2010-11 & 2011-12 DAT ED 05.05.2016, WHEREIN THE TRIBUNAL HAS OBSERVED AND HELD AS UNDER: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE MACHINERY WAS INSTALLED AND USED FOR MANUFACTURING ACTIVITY FOR LESS THAN 180 DAYS. THEREFORE, THE ASSESSING OFFICER ALLOWED T HE ADDITIONAL DEPRECIATION AT THE RATE OF 10%. THE QUESTION ARISE S FOR CONSIDERATION IS WHETHER THE ASSESSEE CAN CLAIM THE REMAINING 10% UN DER SECTION 32(1)(IIA) OF THE ACT IN THE SUBSEQUENT YEAR? THIS ISSUE WAS C ONSIDERED BY THIS TRIBUNAL IN M/S AUTOMOTIVE COACHES & COMPONENTS LTD. (SUPRA) A ND FOUND THAT THE ASSESSEE IS ENTITLED FOR REMAINING 10% ADDITIONAL D EPRECIATION DURING THE SUBSEQUENT YEAR. IN FACT, THIS TRIBUNAL OBSERVED AS FOLLOWS:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EI THER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. SECTION 32(1)(IIA) PROVIDES FOR ADDITIONAL DEPRECIATION AT THE RATE OF 20%. THE ASSESSING OFFICER ALLOWED 10% OF ADDITIONAL DEPRECIA TION IN RESPECT OF THE PLANT AND MACHINERY PURCHASED DURING THE YEA R UNDER CONSIDERATION. THE ASSESSING OFFICER FOUND THAT THE ADDITIONS TO FIXED ASSETS WERE MADE IN THE SECOND HALF OF THE FINANCIA L YEAR, THEREFORE, 50% OF ADDITIONAL DEPRECIATION HAS BEEN CLAIMED. TH E BALANCE 50% WAS CARRIED FORWARD IN THE NEXT YEAR. THE ASSESSING OFFICER FOUND THAT THE ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY DURING THE YEAR IN WHICH THE MACHINERY WAS INSTALLED AND USED FOR BUSI NESS OF THE ITA NO.1021/CHNY/2018 :- 3 -: ASSESSEE. THERE IS NO PROVISION IN THE INCOME-TAX A CT FOR CARRY FORWARD OF THE ADDITIONAL DEPRECIATION TO THE SUBSE QUENT ASSESSMENT YEAR. THIS ISSUE WAS EXAMINED BY THE COCHIN BENCH O F THIS TRIBUNAL IN APOLLO TYRES LTD. V. ACIT (SUPRA). THE COCHIN BEN CH FOUND THAT IF ADDITIONAL DEPRECIATION COULD NOT BE ALLOWED AT THE RATE OF 20% DURING THE YEAR IN WHICH THE MACHINERY WAS INSTALLE D, THE BALANCE 50% HAS TO BE ALLOWED IN THE SUBSEQUENT YEAR. IN FA CT, THE COCHIN BENCH OF THIS TRIBUNAL HAS OBSERVED AS FOLLOWS:- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTION 3 2(1)(IIA) READS AS FOLLOWS: '32(1)(IIA) IN THE CASE OF ANY NEW MACHINERY OR PLANT (OTHER THAN SHIPS AND AIRCRAFT), WHICH HAS BEEN ACQUIRED A ND INSTALLED AFTER THE 31 ST DAY OF MARCH, 2005, BY AN ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCTIO N OF ANY ARTICLE OR THING, A FURTHER SUM EQUAL TO TWENTY PER CENT OF THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALL OWED AS DEDUCTION UNDER CLAUSE (II): PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED IN RESP ECT OF (A) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALL ATION BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE IND IA BY ANY OTHER PERSON; OR (B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE P REMISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODAT ION IN THE NATURE OF A GUEST-HOUSE; OR (C) ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLE S; OR (D) ANY MACHINERY OR PLANT, THE WHOLE OF THE ACTUAL COST OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPRECIATION OR OTHERWISE) IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUS INESS OR PROFESSION' OF ANY ONE PREVIOUS YEAR.' 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT, WHICH READS AS FOLLOWS: 'PROVIDED FURTHER THAT WHERE AN ASSET REFERRED TO C LAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA), AS THE CASE MAY BE, IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSE OF BUSINESS OR PROFESSION FOR A PER IOD OF LESS THAN ONE HUNDRED AND EIGHTY DAYS IN THAT PREVIOUS Y EAR, THE DEDUCTION UNDER THIS SUB-SECTION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLA USE (I) OR CLAUSE (II) OR CLAUSE (IIA) AS THE CASE MAY BE.' 11. A BARE READING OF THIS SECTION 32(1)(IIA) CLEARLY SAYS THAT IN CASE A NEW MACHINERY OR PLANT WAS ACQUIRED AND INSTALLED AFTER 31-03- 2005 BY AN ASSESSEE, WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURE OR PRODUCE OF ARTICLE OR THING, THEN, A SUM EQUAL T O 20% OF THE ACTUAL COST OF THE MACHINERY AND PLANT SHALL BE ALLOWED AS A DEDUCTION. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS ACQUIRED AND I NSTALLED THE MACHINERY AFTER 31-03-2005. IT IS ALSO NOT IN DISPU TE THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OF ARTICLE O R THING. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION WHICH IS EQUIVALENT TO 20% OF THE ACTUAL COST OF SUCH MACHIN ERY. THE DISPUTE IS THE YEAR IN WHICH THE DEPRECIATION HAS TO BE ALL OWED. THE ASSESSEE HAS ALREADY CLAIMED 10% OF THE DEPRECIATION IN THE EARLIER ITA NO.1021/CHNY/2018 :- 4 -: ASSESSMENT YEAR SINCE THE MACHINERY WAS USED FOR LE SS THAN 180 DAYS AND CLAIMING THE BALANCE 10% IN THE YEAR UNDER CONSIDERATION. SECTION 32(1)(IIA) DOES NOT SAY THAT THE YEAR IN WHIC H THE ADDITIONAL DEPRECIATION HAS TO BE ALLOWED. IT SIMPLY SAYS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION EQUAL TO 20% O F THE COST OF THE MACHINERY PROVIDED THE MACHINERY OR PLANT IS ACQUIR ED AND INSTALLED AFTER 31-03-2005. PROVISO TO SECTION 32(1)(IIA) SAYS THAT IF THE MACHINERY WAS ACQUIRED BY THE ASSESSING DURING THE PREVIOUS YEAR AND HAS PUT TO USE FOR THE PURPOSE OF BUSINESS LESS THAN 180 DAYS, THE DEDUCTION SHALL BE RESTRICTED TO 50% OF THE AMO UNT CALCULATED AT THE PRESCRIBED RATE. THEREFORE, IF THE MACHINERY IS PUT TO USE IN ANY PARTICULAR YEAR, THE ASSESSEE IS ENTITLED FOR 50% O F THE PRESCRIBED RATE OF ADDITIONAL DEPRECIATION. THE INCOME-TAX ACT IS SILENT ABOUT THE ALLOWANCE OF THE BALANCE 10% ADDITIONAL DEPRECI ATION IN THE SUBSEQUENT YEAR. TAKING ADVANTAGE OF THIS POSITION, THE ASSESSEE NOW CLAIMS THAT THE YEAR IN WHICH THE MACHINERY WAS PUT TO USE THE ASSESSEE IS ENTITLED FOR 50% ADDITIONAL DEPRECIATIO N SINCE THE MACHINERY WAS PUT TO USE FOR LESS THAN 180 DAYS AND THE BALANCE 50% SHALL BE ALLOWED IN THE NEXT YEAR SINCE THE ELI GIBILITY OF THE ASSESSEE FOR CLAIMING 20% OF THE ADDITIONAL DEPRECI ATION CANNOT BE DENIED BY INVOKING SECOND PROVISO TO SECTION 32(1)(I I) OF THE ACT. 12. THIS ISSUE WAS CONSIDERED BY THE DELHI BENCH O F THIS TRIBUNAL IN THE CASE OF COSMO FILMS LTD (SUPRA). THE REVENUE HAS TAKEN A SIMILAR GROUND AS TAKEN BEFORE THIS TRIBUNAL THAT T HE ASSESSEE CANNOT CARRY FORWARD THE ADDITIONAL DEPRECIATION TO BE ALL OWED IN THE SUBSEQUENT ASSESSMENT YEAR. THE DELHI BENCH OF THIS TRIBUNAL AFTER CONSIDERING THE PROVISIONS OF SECTION 32(1)(IIA) AND PROVISO TO SECTION 321)(II) OF THE ACT FOUND THAT WHEN THERE IS NO RESTR ICTION IN THE ACT TO DENY THE BENEFIT OF BALANCE 50%, THE ASSESSEE IS ENTITLED FOR THE BALANCE ADDITIONAL DEPRECIATION IN THE SUBSEQUENT A SSESSMENT YEAR. IN FACT, THE DELHI BENCH OF THIS TRIBUNAL HAS OBSER VED AS FOLLOWS AT PAGES 641 AND 642 OF THE ITD: ' THUS, THE INTENTION WAS NOT TO DENY THE BENEFIT T O THE ASSESSEES WHO HAVE ACQUIRED OR INSTALLED NEW MACHIN ERY OR PLANT. THE SECOND PROVISO TO SECTION 32(1)(II) RESTRI CTS THE ALLOWANCES ONLY TO 50% WHERE THE ASSETS HAVE BEEN ACQUIRED AND PUT TO USE FOR A PERIOD LESS THAN 180 DAYS IN THE YEAR OF ACQUISITION. THIS RESTRICTION IS ONLY O N THE BASIS OF PERIOD OF USE. THERE I NO RESTRICTION THAT BALANCE OF ONE TIME INCENTIVE IN THE FORM OF ADDITIONAL SUM OF DEPRECIA TION SHALL NOT BE AVAILABLE IN THE SUBSEQUENT YEAR. SECTION 32 (2) PROVIDES FOR A CARRY FORWARD SET UP OF UNABSORBED DEPRECIATION. THIS ADDITIONAL BENEFIT IN THE FORM O F ADDITIONAL ALLOWANCE U/S 32(1)(IIA) IS ONE TIME BENEFIT TO ENCOU RAGE THE INDUSTRIALIZATION AND IN VIEW OF THE DECISION OF HO N'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. V. CI T [1992] 196 ITR 188, THE PROVISIONS RELATED TO IT HAVE TO B E CONSTRUED REASONABLY, LIBERALLY AND PURPOSIVE TO MA KE THE PROVISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. THIS ADDITIONAL BENEFIT IS TO GIVE IMPETUS TO INDUS TRIALIZATION AND THE BASIC INTENTION AND PURPOSE OF THESE PROVIS IONS CAN BE REASONABLY AND LIBERALLY HELD THAT THE ASSESSEE DESERVES TO GET THE BENEFIT IN FULL WHEN THERE IS NO RESTRIC TION IN THE STATUTE TO DENY THE BENEFIT OF BALANCE OF 50% WHEN THE NEW MACHINERY AND PLANT WERE ACQUIRED AND USED FOR LESS THAN 180 DAYS. ONE TIME BENEFIT EXTENDED TO ASSESSEE HAS BEEN EARNED IN THE YEAR OF ACQUISITION OF NEW MACHINERY AND PLANT . IT HAS BEEN CALCULATED @15% BUT RESTRICTED TO 50% ONLY ON ACCOUNT OF USAGE OF THESE PLANT & MACHINERY IN THE YEAR OF ACQUISITION. IN SECTION 32(1)(IIA), THE EXPRESSION U SED I 'SHALL BE ALLOWED'. THUS, THE ASSESSEE HAD EARNED THE BENE FIT AS ITA NO.1021/CHNY/2018 :- 5 -: SOON AS HE HAD PURCHASED THE NEW MACHINERY AND PLAN T IN FULL BUT IT IS RESTRICTED TO 50% IN THAT PARTICULAR YEAR ON ACCOUNT OF PERIOD USAGES. SUCH RESTRICTIONS CANNOT DIVEST THE STATUTORY RIGHT. LAW DOES NOT PROHIBIT THAT BALANCE 50% WILL NOT BE ALLOWED IN SUCCEEDING YEAR. THE EXTRA DEPREC IATION ALLOWABLE U/S 32(1)(IIA) IN AN EXTRA INCENTIVE WHICH H AS BEEN EARNED AND CALCULATED IN THE YEAR OF ACQUISITION BU T RESTRICTED FOR THAT YEAR TO 50% ON ACCOUNT OF USAGE. THE SO EA RNED INCENTIVE MUST BE MADE AVAILABLE IN THE SUBSEQUENT YEAR. THE OVERALL DEDUCTION OF DEPRECIATION U/S 32 SHALL D EFINITELY NOT EXCEED THE TOTAL COST OF MACHINERY AND PLANT . IN VIEW OF THIS MATTER, WE SET ASIDE THE ORDERS OF THE AUTHORI TIES BELOW AND DIRECT TO EXTEND THE BENEFIT. WE ALLOW GROUND N O.2 OF THE ASSESSEE'S APPEAL. SINCE WE HAVE DECIDED GROUND NO. 2 IN FAVOUR OF ASSESSEE, THERE IS NO NEED TO DECIDE THE ALTERNATE CLAIM RAISED IN GROUND NO.3. THE SAME IS DISMISSED. ' 13. THIS ISSUE WAS ALSO CONSIDERED BY ANOTHER BENCH OF THIS TRIBUNAL AT DELHI IN SIL INVESTMENT LTD (SUPRA). AT PAGE 233 OF THE TTJ, THE TRIBUNAL HAS OBSERVED AS FOLLOWS: '40. THERE IS NOTHING ON RECORD TO SHOW THAT THE DI RECTIONS GIVEN BY THE LEARNED CIT(A) ARE NOT PROPER. THE ELIG IBILITY FOR DEDUCTION OF ADDITIONAL DEPRECIATION STANDS ADMITTE D, SINCE 50 PER CENT THEREOF HAD ALREADY BEEN ALLOWED BY THE AO IN THE ASST.YR.2005-06, I.E. THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THEREFORE, OBVIOUSLY, THE BALANCE 50 PER CENT OF THE DEDUCTION IS TO BE ALLOWED IN THE CURRE NT YEAR, I.E. ASST. YR. 2006-07. THE LEARNED CIT(A) HAS MERELY DIR ECTED THE VERIFICATION OF THE CONTENTIONS OF THE ASSESSEE AND TO ALLOW THE BALANCE ADDITIONAL DEPRECIATION AFTER SUC H FACTUAL VERIFICATION. ACCORDINGLY, FINDING NO MERIT THEREIN , GROUND NO.3 RAISED BY THE DEPARTMENT IS REJECTED.' 14. A SIMILAR VIEW WAS TAKEN BY MUMBAI BENCH OF THI S TRIBUNAL IN MITC ROLLING MILLS (P.) LTD. (SUPRA). IN VIEW OF THE ABOVE DECISIONS OF THE CO- ORDINATE BENCHES OF THIS TRIBUNAL ON IDENTI CAL SET OF FACTS THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE BALA NCE 50% OF THE DEPRECIATION HAS TO BE ALLOWED IN THE SUBSEQUENT YE AR, THEREFORE, THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE ARE S ET SIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF BALANCE 50% ADDITIONAL DEPRECIATION IN THE YEAR UNDER CONSIDERA TION. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF KARNATAKA HIGH COURT IN RITTAL INDIA PVT. LTD. (SUPRA). THE KARNATA KA HIGH COURT, AFTER EXTRACTING THE PROVISIONS OF SECTION 32(1)(IIA ) OF THE ACT, FOUND THAT BENEFICIAL LEGISLATION HAS TO BE INTERPRETED L IBERALLY SO AS TO BENEFIT THE ASSESSEE. KARNATAKA HIGH COURT HAS ALSO FOUND THAT THE INTENTION OF THE LEGISLATION IS TO ALLOW ADDITIONAL BENEFIT. THE KARNATAKA HIGH COURT OPINED THAT THE PROVISO WOULD NOT RESTRAIN THE ASSESSEE FROM CLAIMING THE BALANCE OF THE BENEFIT O F ADDITIONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR. ACC ORDINGLY, CONFIRMED THE ORDER OF THE BANGALORE BENCH OF THIS TRIBUNAL. IN FACT, THE KARNATAKA HIGH COURT HAS OBSERVED AS FOLLOWS:- 7. CLAUSE (IIA) OF SECTION 32(1) OF THE ACT, AS IT N OW STANDS, WAS SUBSTITUTED BY THE FINANCE ACT, 2005, APPLICABL E WITH EFFECT FROM 0L.04.2006. PRIOR TO THAT, A PROVISO TO THE SAID CLAUSE WAS THERE, WHICH PROVIDED FOR THE BENEFIT TO BE GIVEN ONLY TO A NEW INDUSTRIAL UNDERTAKING, OR ONLY WHERE A NEW INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRO DUCE DURING ANY YEAR PREVIOUS TO THE RELEVANT ASSESSMENT YEAR. ITA NO.1021/CHNY/2018 :- 6 -: 8. THE AFORESAID TWO CONDITIONS, I.E., THE UNDERTAK ING ACQUIRING NEW PLANT AND MACHINERY SHOULD BE A NEW INDUSTRIAL UNDERTAKING, OF THAT IT SHOULD BE CLAIMED IN ONE YEAR, HAVE BEEN DONE AWAY BY SUBSTITUTING CLAUSE (I IA) WITH EFFECT FROM 01.0.2006. THE GRANT OF ADDITIONAL DEPR ECIATION, UNDER THE AFORESAID PROVISION, IS FOR THE BENEFIT O F THE ASSESSEE AND WITH THE PURPOSE OF ENCOURAGING INDUSTRIALIZATION, BY EITHER SETTING UP A NEW INDUS TRIAL UNIT OR BY EXPANDING THE EXISTING UNIT BY PURCHASE OF NEW P LANT AND MACHINERY, AND PUTTING IT TO USE FOR THE PURPOSE OF BUSINESS. THE PROVISO TO CLAUSE [II] OF THE SAID SECTION MAKES IT CLEAR THAT ONLY 50% OF THE 20% WOULD BE ALLOWABLE, IF THE NEW PLANT AND MACHINERY SO ACQUIRED IS PUT TO USE FOR L ESS THAN 180 DAYS IN A FINANCIAL YEAR. HOWEVER, IT NOWHERE R ESTRICTS THAT THE BALANCE 10% WOULD NOT BE ALLOWED TO BE CLA IMED BY THE ASSESSEE IN THE NEXT ASSESSMENT YEAR. 9. THE LANGUAGE USED IN CLAUSE (IIA) OF THE SAID SEC TION CLEARLY PROVIDES THAT 'A FURTHER SUM EQUAL TO 20% O F THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALL OWED AS DEDUCTION UNDER CLAUSE (II)'. THE WORD 'SHALL' USED IN THE SAID CLAUSE IS VERY SIGNIFICANT. THE BENEFIT WHICH IS TO BE GRANTED IS 20% ADDITIONAL DEPRECIATION. BY VIRTUE O F THE PROVISO REFERRED TO ABOVE, ONLY 10% CAN BE CLAIMED IN ONE YEAR, IF PLANT AND MACHINERY IS PUT TO USE FOR LESS THAN 180 DAYS SAID FINANCIAL YEAR. VERY PURPOSE OF INSERT ION OF CLAUSE (IIA) WOULD BE DEFEATED BECAUSE IT PROVIDES F OR 20% DEDUCTION WHICH SHALL BE ALLOWED. 10. IT HAS BEEN CONSISTENTLY HELD BY THIS COURT, AS WELL AS THE APEX COURT, THAT BENEFICIAL LEGISLATION, AS IN THE PRESENT CASE, SHOULD BE GIVEN LIBERAL INTERPRETATION SO AS TO BEN EFIT THE ASSESSEE. IN THIS CASE, THE INTENTION OF THE LEGISL ATION IS ABSOLUTELY CLEAR, THAT THE ASSESSEE SHALL BE ALLOWE D CERTAIN ADDITIONAL BENEFIT, WHICH WAS RESTRICTED BY THE PRO VISO TO ONLY HALF OF THE SAME BEING GRANTED IN ONE ASSESSME NT YEAR, IF CERTAIN CONDITION WAS NOT FULFILLED. BUT, THAT, IN OUR CONSIDERED VIEW, WOULD NOT RESTRAIN THE ASSESSEE FR OM CLAIMING THE BALANCE OF THE BENEFIT IN THE SUBSEQUE NT ASSESSMENT YEAR. THE TRIBUNAL, IN OUR VIEW, HAS RIG HTLY HELD, THAT ADDITIONAL DEPRECIATION ALLOWED UNDER SECTION 32(1)(IIA) OF THE ACT IS A ONE TIME BENEFIT TO ENCOURAGE INDUSTRIALIZATION, AND PROVISIONS RELATED TO IT HAV E TO BE CONSTRUED REASONABLY, LIBERALLY AND PURPOSIVELY, TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING ADDITIONAL ALLO WANCE. WE ARE IN FULL AGREEMENT WITH SUCH OBSERVATIONS MADE B Y THE TRIBUNAL. 6. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE ASSESSEE IS ENTITLED FOR REMAINING 10% OF THE DEPRECIATION DURING THE YEAR UNDER CONSIDERATIO N. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW BALAN CE 50% OF DEPRECIATION, NAMELY, 10% OF ADDITIONAL DEPRECIATIO N DURING THE YEAR UNDER CONSIDERATION. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR REMAINING 10% ADDITION AL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT. THE ORDERS OF THE LOWE R AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE BALANCE 50% DEPRECIATION, NAMELY, 10% ADDITIONAL DEPRECIATION D URING THE YEAR UNDER CONSIDERATION. ITA NO.1021/CHNY/2018 :- 7 -: 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF T HE TRIBUNAL, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE BALANCE 50% OF DEPRECIATION I.E ., 10% ADDITIONAL DEPRECIATION AS CLAIMED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2012 -13 ALSO. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 6. AS IT IS NOTICED THAT THE ISSUES IN THIS APPEAL ARE SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE ASSESSEES OWN CASE FOR THE AY 2012-13 REFERRED TO SUPRA, RESP ECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE, THE FINDINGS OF THE LD.CIT(A) ON THESE ISSUES STAND CONFIRMED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH DAY OF MARCH, 2019 IN CHENNAI. SD/- SD/- ( . ) ( A. MOHAN ALANKAMONY ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, / /DATED: 19 TH MARCH, 2019. TLN ) &01 21 /COPY TO: 1. % /APPELLANT 4. 3 /CIT 2. &'% /RESPONDENT 5. 1 & /DR 3. 3 ( ) /CIT(A) 6. /GF