Parry Agro Industries Limited, CHENNAI V. DCIT, CHENNAI

ITA 1114/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6127 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M PALANICHAMY CIT
• Keywords: Depreciation; Additional depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . , , BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./I.T.A. NO. 1114/MDS/2017 / ASSESSMENT YEAR : 2012-2013. M/S. PARRY AGRO INDUSTRIES LIMITED, PARRY HOUSE, 5 TH FLOOR, 43, MOORE STREET CHENNAI 600 001. [ PAN AAFCP 9414M ] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(1) CHENNAI. ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : SHRI. SP. CHIDAMBARAM, ADV. $%! ' # /RESPONDENT BY : SHRI. M. PALANICHAMY, ADDL CIT & ' ' () /DATE OF HEARING : 20-09-2017 *+ ' () /DATE OF PRONOUNCEMENT : 21-09-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER: ASSESSEE IN THIS APPEAL FILED AGAINST AN ORDER DAT ED 31.01.2017 OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS)-3, CHENNAI, HAS TAKEN ALTOGETHER FOUR GROUNDS OF WHIC H GROUND NO.1 & 4 ARE GENERAL IN NATURE NEEDING NO SPECIFIC ADJUDICAT ION. ITA NO.1114/MDS/2017. :- 2 -: 2. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTE D THAT HE WAS WITHDRAWING GROUND NO.3. ACCORDINGLY, GROUND N O.3 IS DISMISSED AS WITHDRAWN. 3. THIS LEAVES US WITH GROUND NO.2, WHICH ASSAILS DISA LLOWANCE OF ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSEE . 4. THE ADDITIONAL DEPRECIATION CLAIMED BY THE ASSESSE E WAS THE BALANCE WHICH REMAINED FROM THE CLAIM MADE FOR ASSE SSMENT YEAR 2011-12 FOR PLANT AND MACHINERY USED FOR A PERIOD L ESS THAN 180 DAYS. ASSESSEE HAD CLAIMED ONLY 50% OF THE ADDITIONAL DE PRECIATION FOR WHICH IT WAS ELIGIBLE, SINCE THE NEW PLANT AND MACH INERY ON WHICH SUCH DEPRECIATION WAS CLAIMED WAS PUT TO USE FOR A PER IOD LESS THAN 180 DAYS IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT Y EAR 2011-12. CLAIM OF THE ASSESSEE FOR THE BALANCE ADDITIONAL DEPRECIA TION FOR THE IMPUGNED ASSESSMENT YEAR WAS DECLINED BY THE LD. AS SESSING OFFICER. ISSUE IN OUR OPINION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. T.P. TEXTILES (P) LTD (2017) 79 TAXMANN.COM 411. WHAT WAS HELD BY THEIR LORDSHIPS AT PARAS 10.1 TO 11.5 OF THE JUDGMENT IS REPRODUCED HEREUNDER:- 10.1. THE PLAIN LANGUAGE OF SECTION 32(1)(IIA) RE AD ALONG WITH THE RELEVANT PROVISO WOULD HAVE US COME TO THE CONCLUSION THAT, THERE IS NO LIMITATION IN THE ASSE SSEE ITA NO.1114/MDS/2017. :- 3 -: CLAIMING THE BALANCE 10% OF ADDITIONAL DEPRECIATION IN THE SUCCEEDING ASSESSMENT YEAR. 10.2. AS A MATTER OF FACT, WITH EFFECT FROM 01.04.2 016, THE AMBIGUITY, IF ANY, IN THIS REGARD, IN THE MIND OF T HE ASSESSING OFFICER, STANDS REMOVED BY VIRTUE OF THE LEGISLATUR E, INCORPORATING IN THE STATUTE, THE NECESSARY CLARIFI CATORY AMENDMENT. 10.3. THE AMENDMENT BROUGHT IN THE RELEVANT PROVISO OBTAINING IN SECTION 32, READS AS FOLLOWS: .... 32. (1) ...... 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 CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLAUSE (IIA)FOR THAT PREVIOUS YEAR, THEN, THE DEDUCTION FOR THE BALANCE FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR SUCH ASSET UNDER CLAUSE (IIA) SHALL BE ALLOWED UNDER THIS SUB- SECTION IN THE IMMEDIATELY SUCCEEDING PREVIOUS YEAR IN RESPECT OF SUCH ASSET: ....... (EMPHASIS IS OURS) 11. WE MAY ONLY INDICATE THAT DURING THE COUR SE OF THE ARGUMENTS, OUR ATTENTION WAS DRAWN TO THE 'MEMORANDUM EXPLAINING THE PROVISIONS IN FINANCIAL BILL, 2015', WHEREBY, THE AFOREMENTIONED AMENDMENT WAS BROUGHT ABOUT. 11.1. THE RELEVANT PART OF THE MEMORANDUM IS EXTRACTED HEREAFTER: ITA NO.1114/MDS/2017. :- 4 -: '..... TO REMOVE THE DISCRIMINATION IN THE MATTER OF ALLOWING ADDITIONAL DEPRECIATION ON PLANT OR MACHINERY USED FOR LESS THAN 180 DAYS AND USED FOR 180 DAYS OR MORE, IT IS PROPOSED TO PROVIDE THAT THE BALANCE 50% OF THE ADDITIONAL DEPRECIATION ON NEW PLANT OR MACHINERY ACQUIRED AND USED FOR LESS THAN 180 DAYS WHICH HAS NOT BEEN ALLOWED IN THE YEAR OF ACQUISITION AND INSTALLATION OF SUCH PLANT AND MACHINERY, SHALL BE ALLOWED IN THE IMMEDIATELY SUCCEEDING PREVIOUS YEAR. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 201 6 AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASS ESSMENT YEAR 2016-17 AND SUBSEQUENT ASSESSMENT YEARS.' 11.2. A PERUSAL OF THE EXTRACT OF THE MEMORANDU M RELIED UPON WOULD SHOW THAT THE LEGISLATURE RECOGNI SED 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 1 80 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 TH E 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 TH E 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 PROVISION, IT COUL D NOT BE SAID THAT THE ASSESSEE COULD NOT CLAIM BALANCE ITA NO.1114/MDS/2017. :- 5 -: DEPRECIATION IN THE A.Y., WHICH FOLLOWS THE A.Y., I N WHICH, THE MACHINERY HAD BEEN BOUGHT AND USED, ALBE IT, FOR LESS THAN 180 DAYS. WE, ARE THEREFORE OF THE OPINION THAT ASSESSEE WAS ELIGIBLE FOR CLAIMING BALANCE 10% OF THE DEPRECIATION IN THE IMPUGNED A SSESSMENT YEAR. LD. ASSESSING OFFICER IS DIRECTED TO ALLOW SUCH CLA IM. GROUND NO.2 OF THE ASSESSEE STANDS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. ORDER PRONOUNCED ON THURSDAY, THE 21ST DAY OF SEPTE MBER, 2017, AT CHENNAI. SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER SD/- ( . ! ' ) (ABRAHAM P. GEORGE) $ %& / ACCOUNTANT MEMBER - ' / CHENNAI . / DATED: 21ST SEPTEMBER, 2017. KV / ' $(0 1 2 1 ( / COPY TO: 1 . ! / APPELLANT 3. & 3( ( ) / CIT(A) 5. 167 $(8 / DR 2. $%! / RESPONDENT 4. & 3( / CIT 6. 79 :' / GF