TECHNOCRAFT INDUSTRIES (INDIA) LTD, MUMBAI V. ASST CIT 11(3)(1), MUMBAI

ITA 1378/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2101 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 28-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANISH KUMAR SINGH
• Keywords: Depreciation; Transfer pricing; International transaction; Additional depreciation; Revised return
• Section: 32(1)(iia)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER IT A NO. 1378/MUM./2017 ( ASSESSMENT YEAR : 20 11 12 ) TECHNOCRAFT INDUSTRIES INDIA LTD. A 25, MIDC, MAROL INDUSTRIAL AREA ROAD NO.3, ANDHERI (EAST) MUMBAI 400 093 PAN AAACT2724P . APP ELL ANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 11(3)(1), MUMBAI . RESPONDENT IT(TP) A NO. 1487/MUM./2017 ( ASSESSMENT YEAR : 20 11 12 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 11(3)(1), MUMBAI . APPELLANT V/S TECHNOCRAFT INDUSTRIES INDIA LTD. A 25, MIDC, MAROL INDUSTRIAL AREA ROAD NO.3, ANDHERI (EAST) MUMBAI 400 093 PAN AAACT2724P . RESPONDENT ASSESSEE BY : SHRI VIJAY MEHTA REVENUE BY : SHRI MANISH KUMAR SINGH DATE OF HEARING 12 .0 6 .2019 DATE OF ORDER 19.06.2019 2 TECHNOCRAFT INDUSTRIES INDIA LTD. O R D E R PER SAKTIJIT DEY. J.M. A FORESAID CROSS APPEALS ARISE OUT OF THE ORDER DATED 22 ND NOVEMBER 2016, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 58, MUMBAI, FOR THE ASSESSMENT YEAR 2011 12. ITA NO.1378/MUM./2017 ASSESSEES APPEAL 2 . IN GROUND NO.1, THE ASSESSEE HAS CHALLENGED THE ADDITION MADE ON ACCOUNT OF ADJUSTMENT TO THE ARM'S LENGTH PRICE OF CORPORATE GUARANTEE FEE. 3 . BRIEF FACTS ARE, THE ASSESSEE , AN INDIAN COMPANY , IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF DRUM CLOSURES, W ELDED STEEL TUBE, SCAFFOLDING, YARN AND COMPONENTS. DURI NG THE YEAR UNDER CONSIDERAT ION THE ASSESSEE ENTERED INTO VARIOUS INTERNATIONAL TRANSACTION S WITH ITS OVE RSEAS ASSOCIATED ENTERPRISES (A E). ONE AMONGST THE AFORESAID TRANSACTION S RELATED TO FURNISHING OF FINANCIAL GUARANTEE IN R ESPECT OF LOAN AVAILED BY ITS AE TECHNOCRAFT TRADING S.P . ZOO, POLLAND. IN THE COURSE OF PROCEEDINGS BEFORE HIM, THE TRANSFER PRICING OFFICER NOTICING THAT THE ASSESSEE HAS CHA RGED GUARANTEE FEE @ 0.90% IN RESPECT OF THE FINANCIAL GUARANTEE PROVID ED ON THE LOAN AVAILED BY THE AE CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY 3 TECHNOCRAFT INDUSTRIES INDIA LTD. ARM'S LENGTH GUARANTEE FEE SHOULD NOT BE CHARGED. IN RESPONSE, IT WAS SUBMITTED BY THE ASSESSEE THAT THE RATE OF GUARANTEE FEE ON SIMILAR TY PES OF LOAN AS AVAILED BY THE AE WORKS OUT TO 0.90%. THUS, IT WAS SUBMITTED , GUARANTEE FEE CHARGED BY THE ASSESSEE @ 0.90% IS AT ARM'S LENGTH PRICE. THE TRANSFER PRICING OFFICER, HOWEVER, DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND ULTIMATELY DETERMINED THE ARM'S LENGTH PRICE OF THE GUARANTEE FEE BY APPLYING THE RATE OF 3% PER ANNUM. AS A RESULT, AN AMOUNT OF ` 44,26,674, WAS SUGGESTED TOWARDS ADJUSTMENT TO THE ARM'S LENGTH PRICE OF THE GUARANTEE FEE SHOWN BY THE ASSESSEE. WHILE FRAMING THE ASSESSMENT ORDER, THE ASSESSING OFFICER ADDED BACK THE AFORESAID ADJUSTMENT PROPOSED BY THE TRANSFER PRICING OFFICER. THE ASSESSEE CHALLENGED THE AFORESAID ADJUSTMENT / ADDITION BEFORE THE FIRST APPELLATE AUTHORITY. 4 . L EARNED COMMISSIONER (APPEALS) NOTICING THAT WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007 08, THE TRIB UNAL HAS UPHELD THE RATE OF 2.08% AS THE ARM'S LENGTH GUARANTEE FEE, FOLLOWED THE SAME AND DIRECTED THE TRANSFER PRICING OFFICER TO DETERMINE THE ARM'S LENGTH PRICE OF GUARANTEE FEE BY APPLYING THE RATE OF 2.08% PER ANNUM. 5 . SHRI VIJAY MEHTA, LEARNED COUNSE L FOR THE ASSESSEE SUBMITTED , THOUGH , IN THE ASSESSMENT YEAR 2007 08 THE TRIBUNAL HAD FIXED THE RATE OF GUARANTEE FEE @ 2.08% P.A. , HOWEVER, IN SUBSEQUENT 4 TECHNOCRAFT INDUSTRIES INDIA LTD. ASSESSMENT YEARS, THE TRIBUNAL HAS ACCEPTED GUARANTEE FEE CHARGED @ 0.90% P.A. TO BE AT ARM'S LENGTH. IN THIS CONTEXT, HE DREW OUR ATTENTION TO THE DECISIONS OF THE TRIBUNAL IN ASSESSMENT YEAR S 2009 10 AND 2010 11. HE SUBMITTED , GUARANTEE FEE CHARGED @ 0.90% P.A. IS AT A HIGHER RATE CONSIDERING THE FACT IN SIMILAR NATURE OF CASES, THE TRI BUNAL AND THE HON'BLE JURISDICTIONAL HIGH COURT HAVE HELD THAT GUARANTEE FEE CHARGED @ 0.50% IS REASONABLE. THUS, HE SUBMITTED , GUARANTEE FEE CHARGED @ 0.90% AS SHOWN BY THE ASSESSEE SHOULD BE ACCEPTED. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF LEARNED COMMISSIONER (APPEALS). 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSEE HAS CHARGED GUARANTEE FEE @ 0.90% PER ANNUM ON THE FINANC IAL GUARANTEE PROVIDED TO THE AE ON LOAN AVAI LED. WHILE THE TRANSFER PRICING OFFICER DETERMINED THE ARM'S LENGTH PRICE OF THE GUARANTEE FEE BY AP PLYING THE RATE OF 3% PER ANNUM, LEARNED COMMISSIONER (APPEALS) REDUCED IT TO 2.08% PER ANNUM RELYING UPON THE DECISION OF THE TRIBUNAL FOR THE ASSESSMENT Y EAR 2007 08. NO DOUBT, WHILE DECIDING ASSESSEES APPEAL IN ASSESSMENT YEAR 2007 08, IN ITA NO.7519/MUM./2011, DATED 8 TH JANUARY 2014, THE TRIBUNAL HAS HELD THAT GUARANTEE FEE @ 2.08% PER ANNUM IS AT ARM'S LENGTH. HOWEVER, WHILE DECIDING IDENTICAL ISSUE IN 5 TECHNOCRAFT INDUSTRIES INDIA LTD. ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10, IN ITA NO.6686/MUM./2014, DATED 31 ST JULY 2018, THE TRIBUNAL HAS ACCEPTED ASSESSEES CLAIM THAT GUARANTEE FEE CHARGED @ 0.90% PER ANNUM IS AT ARM'S LENGTH. THE SAME VIEW WAS REITERATED BY THE TRIBUNAL WH ILE DECIDING IDENTICAL ISSUE IN ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2010 11, VIDE ITA NO. 7565/MUM./2014, DATED 27 TH DECEMBER 2018. IT IS ALSO RELEVANT TO OBSERVE , IN SIMILAR NATURE OF CASES DIFFERENT BENCHES OF THE TRIBUNAL , INCLUDING MUMBAI BENCHES , HAVE HELD THAT GUARANTEE FEE CHARGED @ 0.50% IS REASONABLE. IN FACT, THE DECISION TAKEN BY THE TRIBUNAL THAT GUARANTEE FEE CHARGED AT 0.5% IS AT ARM'S LENGTH HAS BEEN ACCEPTED NOT ONLY BY THE HON'BLE JURISDICTIONAL HIGH COURT BUT ALSO BY THE HON'BLE SUPR EME COURT , AS WOULD BE EVIDENT FROM THE DECISION IN CIT V/S GLENMARK PHARMACEUTI CALS LTD. IN CIVIL APPEAL NO.12632/2017. IN VIEW OF THE AFORESAID, WE DIRECT THE ASSESSING OFFICER TO ACCEPT THE ARM'S LENGTH PRICE OF THE GUARANTEE FEE @ 0.90% PER ANNUM AS SH OWN BY THE ASSESSEE. THIS GROUND IS ALLOWED. 8 . IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION MADE ON ACCOUNT OF ADJUSTMENT MADE TO THE ARM'S LENGTH PRICE OF INTE REST ON LOANS ADVANCED TO THE A ES. 9 . BRIEF FACTS ARE, IN THE COURSE OF PROCEEDINGS BE FORE HIM, THE TRANSFER PRICING OFFICER FOUND THAT THE ASSESSEE HAD ADVANCED LOANS TO 6 TECHNOCRAFT INDUSTRIES INDIA LTD. THREE OF ITS OVERSEAS A ES. ON FURTHER VERIFICATION, HE FOUND THAT ASSESSEE HAD ADVANCED LOANS TO TEC HNOCRAFT HUNGARY KFT AND IMPACT CAPHOLDING S WITHOUT CHARGING ANY INTERE ST. WHEREAS, IT HAS ADVANCED LOAN TO ANHUI RELIABLE STEEL TECHNOLOGIES, CHINA, BY CHARGING INTEREST @ 8% PER ANNUM. AFTER ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN AS TO WHY ARM'S LENGTH RATE OF INTERES T ON THE LOAN ADVANCED TO THE AES SHOULD NO T BE DETERMINED, THE TRANSFER PRICING OFFICER ULTIMATELY PROCEEDED TO DETERMINE THE ARM'S LENGTH RATE OF INTEREST @ 10% PER ANNUM WHICH WORKED OUT TO ` 47,66,080. SINCE THE ASSESSEE HAD ALREADY CHARGED INTEREST @ ` 32,90,617, THE RESULTANT SHORTFALL OF ` 14,75,463, WAS TREATED AS ADJUSTMENT TO THE ARM'S LENGTH PRICE OF INTEREST. ACCORDINGLY, THE ASSESSING OFFICER MADE THE ADDITION WHILE FRAMING THE ASSESSMENT ORDER. WHILE DECIDING ASSESSEES APPEAL ON THE ISSUE, LEARNED COMMISSIONER (APPEALS) HELD THAT SI NCE THE LOANS WERE ADVANC ED IN FOREIGN CURRENCY TO THE A ES LOCATED IN DIFF ERENT COUNTRIES, THE BENCH MARKING OF INTEREST ON LOAN HAS TO BE DONE AS PER THE RATES PREVAILING IN THOSE COUNTRIES. FURTHER, LEARNED COMMISSIONER (APPEALS) OBSERVED , AVERAGE ONE YEA R LIBOR RATE OF INTEREST DURING THE YEAR WAS LESS THAN 1%. THUS, HE OBSERVED , THE INTEREST RATE OF 8% CHARGED BY THE ASS ESSEE ON LOAN ADVANCED TO THE AE SHOULD BE CONSIDERED TO BE AT ARM'S LENGTH. THEREFORE, HE DIRECTED THE ASSESSING OFFICER TO ADOPT THE I NTEREST RATE OF 8% WHILE DETERMINING THE ARM'S LENGTH PRICE OF INTE REST ON LOANS ADVANCED TO THE A ES. 7 TECHNOCRAFT INDUSTRIES INDIA LTD. 10 . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED , INTEREST F REE LOANS ADVANCED TO THE TWO A ES WERE SHORT TERM LOANS, HENCE, THE ASSESSEE HAD NOT CHARGED ANY INTEREST. HOWEVER, HE SUBMITTED , IN RESPECT OF SUCH LOAN S INTEREST CANNOT BE CHARGED @ 8% AS LIBOR RATE IS APPLICABLE. HE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR S 2009 10 AND 2010 11, THE TRIBUNAL HAS DI RECTED THE ASSESSING OFFICER TO COMPUTE INTEREST ON LOAN BY APPLYING LIBOR RATE. THUS, HE SUBMITTED , SIMILAR DIRECTIONS MAY BE GIVEN IN THE IMPUGNED ASSESSMENT YEAR AS WELL. 11 . THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED , SINCE THE ASSESSEE ITSELF HAD CHARGED INTEREST @ 8% IN RESPECT OF L OAN ADVANCED TO ONE OF THE A ES, THE SAME RATE SHOULD ALSO BE APPLIED IN RESPECT OF THE INTEREST FREE LOAN S ADVANCED TO OTHER TWO A ES. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , AT L EAST INTEREST SHOULD BE CHARGED @ LIBOR PLUS SOME BASIS POINTS, AS IS CONSISTENTLY BEING HELD BY THE TRIBUNAL IN MANY OTHER CASES. 12 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. INSOFAR AS THE INTEREST CHARGED @ 8% ON THE LOAN AD VANCED TO ANHUI RELIABLE STEEL TECHNOLOGIES, CHINA, THERE IS NO SURVIVING DISPUTE AS LEARNED COMMISSIONER (APPEALS) HAS ACCEPTED THE ARM'S LENGTH INTEREST RATE OF 8%. ADMITTEDLY, THE DEPARTMENT HAS NOT FILED 8 TECHNOCRAFT INDUSTRIES INDIA LTD. ANY APPEAL AGAINST THE AFORESAID DECISION OF THE FIRST APPELLATE AUTHORITY. THEREFORE, THE DISPUTE REMAINS ONLY WITH REGARD TO THE ARM'S LENGTH RATE OF INTEREST IN RESPECT OF INTEREST FRE E LOANS ADVANCED TO TWO OTHER A ES. WHILE THE TRANSFER PRICING OFFICER HAS DETERMINED THE ARM'S LENGTH RATE OF INTERES T @ 10%, LEARNED COMMISSIONER (APPEALS) HAS REDUCED IT TO 8%. THERE IS NO DISPU TE THAT THE LOAN GIVEN TO THE AES WAS IN FOREIGN CURRENCY. THEREFORE , THE ARM'S LENGTH RATE OF INTEREST HAS TO BE DETERMINED BY APPLYING THE RATE OF INTEREST APPLICABLE TO THE C URRENCY IN WHICH THE LOAN HAS TO BE REPAID. THE AFORESAID RATIO HAS BEEN LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN COTTON NATURALS INDIA PVT. LTD., 55 TAXMANN.COM 523 (DEL.). WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009 10, VIDE ITA NO.6686/MUM./2014, DATED 31 ST JULY 2018, THE TRIBUNAL FOLLOWING THE AFORESAID DECISION OF THE HON'BLE DELHI HIGH COURT HAD DIRECTED THE ASSESSING OFFICER TO COMPUT E INTEREST AS PER INTEREST RATE APPLICABLE TO THE CURRENCY IN WHICH THE LOAN WA S REQUIRED TO BE REPAID BY THE ASSESSEE. AGAIN , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010 11, THE TRIBUNAL , IN ITA NO. 7565/MUM./2014, DATED 27 TH DECEMBER 2018, FOLLOWING ITS EARLIER ORDER ISSUED SIMILAR DIRECTION TO THE ASSESSING OFFICER. KEEPING IN VIEW THE AFORESAID DECISION S OF THE TRIBUNAL IN ASSESSEES OWN CASE , WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE ARM'S LENGTH INTEREST BY FOLLOWING THE SAME METHO DOLOGY UNDER WHICH THE ASSESSING OFFICER 9 TECHNOCRAFT INDUSTRIES INDIA LTD. WOULD BE DETERMINING THE ARM'S LENGTH INTEREST IN ASSESSMENT YEAR S 2009 10 AND 2010 11 AS PER THE DIRECTIONS OF THE TRIBUNAL. THIS GROUND IS PARTLY ALLOWED. 13 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. IT ( TP) A NO. 1487 /MUM./2017 REVENUE S APPEAL 14 . THE SOLITARY ISSUE ARISING FOR CONSIDERATION IN THIS APPEAL RELATES TO ALLOWANCE OF ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION. 15 . BRIEF FACTS ARE, WHILE VERIFYING THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE I N THE COURSE OF AS SESSMENT P ROCEEDING , THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED ADDITIONAL DEPRECIATION. THUS, HE CALLED UPON THE ASSESSEE TO FURNISH THE NECESSARY DETAILS / DOCUMENTS TO JUSTIFY ITS CLAIM. IN RESPONSE, IT WAS SUBMITTED B Y THE ASSESSEE THAT IN THE PRECEDING ASSESSMENT YEAR, THE ASSESSEE HAD PURCHASED CERTAIN NEW PLANT AND MACHINERY FOR USE IN ITS BUSINESS ON WHICH IT WAS ELIGIBLE TO CLAIM ADDITIONAL DEPRECIATION @ 20%. HOWEVER, SINCE THE NEW PLANT AND MACHINERY WAS PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS IN THE PRECEDING ASSESSMENT YEAR I.E., ASSESSMENT YEAR 2010 11, ADDITIONAL DEPRECIATION WAS RESTRICTED TO 50% OF THE AMOUNT ALLOWABLE TO THE ASSESSEE @ 20%. IN OTHER WORDS, ADDITIONAL DEPRECIATION WAS ALLOWED @ 10% IN STEAD OF 20%. THUS, IT WAS 10 TECHNOCRAFT INDUSTRIES INDIA LTD. SUBMITTED , THE BALANCE AMOUNT OF ADDITIONAL DEPRECIATION WHICH WAS NOT ALLOWED IN ASSESSMENT YEAR 2010 11 WAS CLAIMED IN THE IMPUGNED ASSESSMENT YEAR. THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE CLAIM OF THE ASSESSEE. HE O BSERVED , THE AMENDED PROVISIONS ALLOWING SUCH BENEFIT TO THE ASSESSEE SINCE WOULD BE APPLICABLE FROM THE ASSESSMENT YEAR 2016 17 ONWARDS, THE ASSESSEE CANNOT CLAIM THE BENEFIT IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, HE DISALLOWED THE CLAIM OF ADDITIO NAL DEPRECIATION. THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE FIRST APPELLATE AUTHORITY. 16 . AFTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE AND FO LLOWING THE DECISION OF THE TRIBUNAL, KOLKATA BENCH, IN BIRLA CORPORATION LTD. V/S DCIT, ITA NO.683/KOL./2011, LEARNED COMMISSIONER (APPEALS) ALLOWED ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION. 17 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER. 18 . THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF LEARNED COMMISSIONER (APPEALS). FURTHER, HE ALSO RELIED UPON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN CIT V/S SHRI T.P. TEXTILES PVT. LTD., [2017] 394 ITR 483 (MAD.). 19 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTE DLY, IN THE ASSESSMENT YEAR 2010 11 THE 11 TECHNOCRAFT INDUSTRIES INDIA LTD. ASSESSEE HAD PURCHASED SOME PLANT AND MACHINERY ON WHICH ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT WAS ALLOWABLE @ 20%. HOWEVER, SINCE THE ASSETS WERE PUT TO USE FOR A PERIOD OF LES S THAN 180 DAYS, DEPRECIATION WAS ALLOWED @ 50% OF THE RATE FIXED I.E., @ 10%. THE BALANCE 10% OF THE ADDITIONAL DEPRECIATION WAS CLAIMED BY THE ASSESSEE IN THE IMPUGNED ASSESSMENT YEAR. THE ISSUE BEFORE US IS, WHETHER BALANCE PORTION OF ADDITIONAL DEPRECA TION PERTAINING TO THE PRECEDING ASSESSMENT YEAR CAN BE ALLOWED IN THE IMPUGNED ASSESSMENT YEAR. WE FIND ANSWER TO THE AFORESAID ISSUE IN THE DECISIONS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE TRIBUNAL, MUMBAI BENCH, IN M/S. WELLKNOWN POLYESTERS LTD. V/S JCIT, ITA NO.7015/MUM./2012, DATED 17 TH SEPTEMBER 2014, HELD THAT IF THE ENTIRE AMOUNT OF ADDITIONAL DEPRECIATION COULD NOT BE ALLOWED IN THE ASSESSMENT YEAR, WHEREIN, THE PLANT AND MACHINERIES WERE PUT TO USE FOR LESS THAN 180 DAYS, THE BALANCE P ORTION OF DEPRECIATION CAN BE ALLOWED IN THE SUBSEQUENT ASSESSMENT YEAR. THE SAME VIEW HAS BEEN EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN CIT V/S RITTAL INDIA PVT. LTD., ITA NO.590/2015, DATED 4 TH JANUARY 2016 AND BY THE HON'BLE MADRAS HIGH COURT IN CIT V/S T.P. TEXTILES PVT. LTD. [2017] 394 ITR 483 (MAD.) . RESPECTFULLY FOLLOWING THE RATIO LAID DOWN IN THE AFORESAID DECISIONS, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE. GROUNDS ARE DISMISSED. 12 TECHNOCRAFT INDUSTRIES INDIA LTD. 20 . IN THE RESULT, REVENUES APP EAL IS DISMISSED. 21 . TO SUM UP, ASSESSEES APPEAL IS PARTLY ALLOWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/ - MANOJ KUMAR AGGARWAL ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (ASSISTANT REGISTRAR) ITAT, MUMBAI