Meenakshi (India) Limited, CHENNAI V. ACIT, CHENNAI

ITA 206/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9697 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: R KUMAR
• Keywords: Depreciation; Additional depreciation; Unabsorbed depreciation
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.206/MDS/2016 ' (' / ASSESSMENT YEAR : 2012-13 M/S MEENAKSHI (INDIA) LIMITED, C/O SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AAACM 5386 Q V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1), CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI R. KUMAR, ADVOCATE ,-*+ . / / RESPONDENT BY : SH. A.B. KOLI, JCIT 0 . 1$ / DATE OF HEARING : 24.03.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 07.04.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 8, CHENN AI, DATED 03.11.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2 I.T.A. NO.206/MDS/16 2. SHRI R. KUMAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WIT H REGARD TO DISALLOWANCE OF 50% OF ADDITIONAL DEPRECIATION CLAI MED BY THE ASSESSEE UNDER SECTION 32(1)(IIA) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. COUNSEL, TH E ASSESSEE HAD ADMITTEDLY INSTALLED THE MACHINERY IN THE EARLIER A SSESSMENT YEAR AND USED THE SAME FOR LESS THAN 180 DAYS. THE ASSE SSING OFFICER ALLOWED 10% OF ADDITIONAL DEPRECIATION UNDER SECTIO N 32(1)(IIA) OF THE ACT AND THE BALANCE WAS CLAIMED DURING THE YEAR UNDER CONSIDERATION. HOWEVER, BOTH THE AUTHORITIES BELOW DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THERE WAS NO PROVISION TO CARRY FORWARD THE DEPRECIATION TO THE SUBSEQUENT YE AR. 3. ON THE CONTRARY, SH. A.B. KOLI, THE LD. DEPARTME NTAL REPRESENTATIVE, SUBMITTED THAT THE CIT(APPEALS) BY PLACING RELIANCE ON THE DECISION OF THIS TRIBUNAL IN I.T.A. NO.1069/ MDS/2010 DATED 06.01.2012, FOUND THAT EACH ASSESSMENT YEAR IS SEPA RATE AND INDEPENDENT, THEREFORE, IN THE ABSENCE OF ANY PROVI SION TO CARRY FORWARD THE RESIDUAL ADDITIONAL DEPRECIATION, THE A SSESSEE CANNOT CLAIM THE SAME IN THE SUBSEQUENT YEAR. 3 I.T.A. NO.206/MDS/16 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD INSTALLED THE MACHINE RY AND USED THE SAME FOR ITS BUSINESS FOR LESS THAN 180 DAYS IN THE EARLIER ASSESSMENT YEAR. IT IS ALSO NOT IN DISPUTE THAT TH E ASSESSING OFFICER HAS ALLOWED 10% ADDITIONAL DEPRECIATION UNDER SECTI ON 32(1)(IIA) OF THE ACT. THE BALANCE 10% IS NOW CLAIMED DURING THE YEAR UNDER CONSIDERATION. THE SAME WAS DISALLOWED BY THE ASSE SSING OFFICER ON THE GROUND THAT THERE IS NO PROVISION IN THE INC OME-TAX ACT TO CARRY FORWARD THE DEPRECIATION TO SUBSEQUENT YEAR. 5. AN IDENTICAL CLAIM WAS CONSIDERED BY THIS TRIBUN AL IN M/S AUTOMOTIVE COACHES & COMPONENTS LTD. V. DCIT IN I.T .A. NO.1789/MDS/2014 DATED 12.02.2016. THIS TRIBUNAL, AFTER REFERRING TO THE DECISION OF COCHIN BENCH OF THIS TRIBUNAL IN APOLLO TYRES LTD. V. ACIT (2014) 64 SOT 203 AND THE JUDGMENT OF KARNA TAKA HIGH COURT IN CIT V. RITTAL INDIA PVT. LTD. IN ITA NO.26 8/2014 DATED 24.11.2015, FOUND THAT THE ASSESSEE IS ELIGIBLE FOR THE BALANCE 10% OF THE ADDITIONAL DEPRECIATION IN THE NEXT ASSESSME NT YEAR. IN FACT, THIS TRIBUNAL HAS OBSERVED AS FOLLOWS:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. SECTION 32(1)(IIA) 4 I.T.A. NO.206/MDS/16 PROVIDES FOR ADDITIONAL DEPRECIATION AT THE RATE OF 20%. THE ASSESSING OFFICER ALLOWED 10% OF ADDITIONAL DEPRECIATION IN R ESPECT OF THE PLANT AND MACHINERY PURCHASED DURING THE YEAR UNDER CONSI DERATION. THE ASSESSING OFFICER FOUND THAT THE ADDITIONS TO FIXED ASSETS WERE MADE IN THE SECOND HALF OF THE FINANCIAL YEAR, THEREFORE, 5 0% OF ADDITIONAL DEPRECIATION HAS BEEN CLAIMED. THE BALANCE 50% WAS CARRIED FORWARD IN THE NEXT YEAR. THE ASSESSING OFFICER FOUND THAT THE ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY DURING THE YEAR IN W HICH THE MACHINERY WAS INSTALLED AND USED FOR BUSINESS OF THE ASSESSEE . THERE IS NO PROVISION IN THE INCOME-TAX ACT FOR CARRY FORWARD O F THE ADDITIONAL DEPRECIATION TO THE SUBSEQUENT ASSESSMENT YEAR. TH IS ISSUE WAS EXAMINED BY THE COCHIN BENCH OF THIS TRIBUNAL IN AP OLLO TYRES LTD. V. ACIT (SUPRA). THE COCHIN BENCH FOUND THAT IF ADDIT IONAL DEPRECIATION COULD NOT BE ALLOWED AT THE RATE OF 20% DURING THE YEAR IN WHICH THE MACHINERY WAS INSTALLED, THE BALANCE 50% HAS TO BE ALLOWED IN THE SUBSEQUENT YEAR. IN FACT, 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 PLA NT (OTHER THAN SHIPS AND AIRCRAFT), WHICH HAS BEEN ACQUIRED AND INSTALLE D AFTER THE 31ST DAY OF MARCH, 2005, BY AN ASSESSEE ENGAGED IN THE B USINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING, A FURTHER SUM EQUAL TO TWENTY PER CENT OF THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE (I I): PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED IN RESP ECT OF (A) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALLATI ON BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA B Y ANY OTHER PERSON; OR (B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREM ISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST-HOUSE; OR (C) ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLES; O R 5 I.T.A. NO.206/MDS/16 (D) ANY MACHINERY OR PLANT, THE WHOLE OF THE ACTUAL COS T OF WHICH IS ALLOWED AS A DEDUCTION (WHETHER BY WAY OF DEPRECIAT ION OR OTHERWISE) IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OF AN Y 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 ACQUIR ED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND IS PUT TO USE FOR THE PURPOSE OF BUSINESS OR PROFESSION FOR A PERIOD OF LESS THAN ONE HUNDRED AND EIGHTY DAYS IN THAT PREVIOUS YEAR, THE DEDUCTION UNDER THIS SUB-SE CTION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSE T UNDER CLAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA) AS THE CASE MAY BE.' 11. A BARE READING OF THIS SECTION 32(1)(IIA) CLEAR LY 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 MANUFAC TURE OR PRODUCE OF ARTICLE OR THING, THEN, A SUM EQUAL TO 20% OF THE A CTUAL COST OF THE MACHINERY AND PLANT SHALL BE ALLOWED AS A DEDUCTION . IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS ACQUIRED AND INSTALLED THE MA CHINERY AFTER 31-03- 2005. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE I S ENGAGED IN THE MANUFACTURE OF ARTICLE OR THING. THEREFORE, THE ASS ESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION WHICH IS EQUIVALENT TO 20% OF THE ACTUAL COST OF SUCH MACHINERY. THE DISPUTE IS THE YEAR IN WHICH TH E DEPRECIATION HAS TO BE ALLOWED. THE ASSESSEE HAS ALREADY CLAIMED 10% OF THE DEPRECIATION IN THE EARLIER ASSESSMENT YEAR SINCE THE MACHINERY WAS USED FOR LESS THAN 180 DAYS AND CLAIMING THE BALANCE 10% IN THE YEAR U NDER CONSIDERATION. SECTION 32(1)(IIA) DOES NOT SAY THAT THE YEAR IN WH ICH THE ADDITIONAL DEPRECIATION HAS TO BE ALLOWED. IT SIMPLY SAYS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION EQUAL TO 20% OF THE COS T OF THE MACHINERY PROVIDED THE MACHINERY OR PLANT IS ACQUIRED AND INS TALLED AFTER 31-03- 2005. PROVISO TO SECTION 32(1)(IIA) SAYS THAT IF TH E 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 DED UCTION SHALL BE RESTRICTED TO 50% OF THE AMOUNT CALCULATED AT THE P RESCRIBED RATE. THEREFORE, IF THE MACHINERY IS PUT TO USE IN ANY PA RTICULAR YEAR, THE ASSESSEE IS ENTITLED FOR 50% OF THE PRESCRIBED RATE OF ADDITIONAL DEPRECIATION. THE INCOME-TAX ACT IS SILENT ABOUT TH E ALLOWANCE OF THE 6 I.T.A. NO.206/MDS/16 BALANCE 10% ADDITIONAL DEPRECIATION IN THE SUBSEQUE NT YEAR. TAKING ADVANTAGE OF THIS POSITION, THE ASSESSEE NOW CLAIMS THAT THE YEAR IN WHICH THE MACHINERY WAS PUT TO USE THE ASSESSEE IS ENTITL ED FOR 50% ADDITIONAL DEPRECIATION SINCE THE MACHINERY WAS PUT TO USE FOR LESS THAN 180 DAYS AND THE BALANCE 50% SHALL BE ALLOWED IN THE NEXT YE AR SINCE THE ELIGIBILITY OF THE ASSESSEE FOR CLAIMING 20% OF THE ADDITIONAL DEPRECIATION CANNOT BE DENIED BY INVOKING SECOND PROVISO TO SECTION 32(1)( II) OF THE ACT. 12. THIS ISSUE WAS CONSIDERED BY THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF COSMO FILMS LTD (SUPRA). THE REVENUE HAS TA KEN A SIMILAR GROUND AS TAKEN BEFORE THIS TRIBUNAL THAT THE ASSESSEE CAN NOT CARRY FORWARD THE ADDITIONAL DEPRECIATION TO BE ALLOWED IN THE SUBSEQ UENT 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 RESTRICTION IN THE ACT TO DENY THE BENEFIT OF BALANCE 50%, THE ASSESSEE IS ENTITLED FOR THE BALANCE ADDIT IONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR. IN FACT, THE DELHI BENCH OF THIS TRIBUNAL HAS OBSERVED AS FOLLOWS AT PAGES 641 AND 6 42 OF THE ITD: ' THUS, THE INTENTION WAS NOT TO DENY THE BENEFIT T O THE ASSESSEES WHO HAVE ACQUIRED OR INSTALLED NEW MACHINERY OR PLA NT. THE SECOND PROVISO TO SECTION 32(1)(II) RESTRICTS THE ALLOWANC ES 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 REST RICTION IS ONLY ON THE BASIS OF PERIOD OF USE. THERE I NO RESTRICTION THAT BALANCE OF ONE TIME INCENTIVE IN THE FORM OF ADDITIONAL SUM OF DEP RECIATION SHALL NOT BE AVAILABLE IN THE SUBSEQUENT YEAR. SECTION 32(2) PROVIDES FOR A CARRY FORWARD SET UP OF UNABSORBED DEPRECIATION. TH IS ADDITIONAL BENEFIT IN THE FORM OF ADDITIONAL ALLOWANCE U/S 32( 1)(IIA) IS ONE TIME BENEFIT TO ENCOURAGE THE INDUSTRIALIZATION AND IN V IEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. V. CIT [1992] 196 ITR 188 , THE PROVISIONS RELATED TO IT HAVE TO BE CONSTRUED REASONABLY, LIBERALLY AND PURPOSIVE TO MAKE THE PRO VISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. THIS ADDIT IONAL BENEFIT IS TO GIVE IMPETUS TO INDUSTRIALIZATION AND THE BASIC INT ENTION AND PURPOSE OF THESE PROVISIONS CAN BE REASONABLY AND LIBERALLY HELD THAT THE ASSESSEE DESERVES TO GET THE BENEFIT IN FULL WHEN T HERE IS NO RESTRICTION IN THE STATUTE TO DENY THE BENEFIT OF B ALANCE OF 50% WHEN THE NEW MACHINERY AND PLANT WERE ACQUIRED AND USED FOR LESS THAN 180 DAYS. ONE TIME BENEFIT EXTENDED TO ASSESSE E 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 ACQUISITI ON. IN SECTION 32(1)(IIA), THE EXPRESSION USED I 'SHALL BE ALLOWED '. THUS, THE 7 I.T.A. NO.206/MDS/16 ASSESSEE HAD EARNED THE BENEFIT AS SOON AS HE HAD P URCHASED THE NEW MACHINERY AND PLANT IN FULL BUT IT IS RESTRICTED TO 50% IN THAT PARTICULAR YEAR ON ACCOUNT OF PERIOD USAGES. SUCH R ESTRICTIONS CANNOT DIVEST THE STATUTORY RIGHT. LAW DOES NOT PROHIBIT T HAT BALANCE 50% WILL NOT BE ALLOWED IN SUCCEEDING YEAR. THE EXTRA D EPRECIATION ALLOWABLE U/S 32(1)(IIA) IN AN EXTRA INCENTIVE WHIC H HAS BEEN EARNED AND CALCULATED IN THE YEAR OF ACQUISITION BUT RESTR ICTED FOR THAT YEAR TO 50% ON ACCOUNT OF USAGE. THE SO EARNED INCENTIVE MUST BE MADE AVAILABLE IN THE SUBSEQUENT YEAR. THE OVERALL DEDUC TION OF DEPRECIATION U/S 32 SHALL DEFINITELY NOT EXCEED THE TOTAL COST OF MACHINERY AND PLANT . IN VIEW OF THIS MATTER, WE SE T ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT TO EXTEND THE B ENEFIT. WE ALLOW GROUND NO.2 OF THE ASSESSEE'S APPEAL. SINCE WE HAVE DECIDED GROUND NO.2 IN FAVOUR OF ASSESSEE, THERE IS NO NEED TO DEC IDE 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 ELIGIBILITY FOR DEDUCTION OF ADDITIONAL DEPRECIATION STANDS ADMITTED, SINCE 50 P ER CENT THEREOF HAD ALREADY BEEN ALLOWED BY THE AO IN THE ASST.YR.2 005-06, I.E. THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. THEREFORE, O BVIOUSLY, THE BALANCE 50 PER CENT OF THE DEDUCTION IS TO BE ALLOW ED IN THE CURRENT YEAR, I.E. ASST. YR. 2006-07. THE LEARNED CIT(A) HA S MERELY DIRECTED THE VERIFICATION OF THE CONTENTIONS OF THE ASSESSEE AND TO ALLOW THE BALANCE ADDITIONAL DEPRECIATION AFTER SUCH 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 ABO VE DECISIONS OF THE CO- ORDINATE BENCHES OF THIS TRIBUNAL ON IDENTICAL SET OF FACTS THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE BALANCE 50% OF T HE DEPRECIATION HAS TO BE ALLOWED IN THE SUBSEQUENT YEAR, THEREFORE, TH E ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE ARE SET SIDE AND THE ASSE SSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF BALANCE 50% ADDITION AL DEPRECIATION IN THE YEAR UNDER CONSIDERATION. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF KARNATAKA HIGH COURT IN RITTAL INDIA PVT. LTD. (SUPRA). THE KARNA TAKA HIGH COURT, AFTER EXTRACTING THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT, FOUND THAT 8 I.T.A. NO.206/MDS/16 BENEFICIAL LEGISLATION HAS TO BE INTERPRETED LIBERA LLY SO AS TO BENEFIT THE ASSESSEE. KARNATAKA HIGH COURT HAS ALSO FOUND THAT THE INTENTION OF THE LEGISLATION IS TO ALLOW ADDITIONAL BENEFIT. TH E KARNATAKA HIGH COURT OPINED THAT THE PROVISO WOULD NOT RESTRAIN THE ASSE SSEE FROM CLAIMING THE BALANCE OF THE BENEFIT OF ADDITIONAL DEPRECIATI ON IN THE SUBSEQUENT ASSESSMENT YEAR. ACCORDINGLY, CONFIRMED THE ORDER OF THE BANGALORE BENCH OF THIS TRIBUNAL. IN FACT, THE KARNATAKA HIG H COURT HAS OBSERVED AS FOLLOWS:- 7. CLAUSE (IIA) OF SECTION 32(1) OF THE ACT, AS IT NOW STANDS, WAS SUBSTITUTED BY THE FINANCE ACT, 2005, APPLICABLE WITH EFFECT FROM 0L.04.2006. PRIOR TO TH AT, A PROVISO TO THE SAID CLAUSE WAS THERE, WHICH PROVIDE D FOR THE BENEFIT TO BE GIVEN ONLY TO A NEW INDUSTRIAL UNDERTAKING, OR ONLY WHERE A NEW INDUSTRIAL UNDERTA KING BEGINS TO MANUFACTURE OR PRODUCE DURING ANY YEAR PREVIOUS TO THE RELEVANT ASSESSMENT YEAR. 8. THE AFORESAID TWO CONDITIONS, I.E., THE UNDERTA KING 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 (IIA) WITH EFFECT FROM 01.0.2006. THE GRANT OF ADDITIONAL DEPRECIATION, UNDER THE AFORESAID PROVISION, IS FOR THE BENEFIT OF THE ASSESSEE AND WITH THE PURPOSE OF ENCOURAGING INDUSTRIALIZATION, BY EITHER SETTING UP A NEW INDUSTRIAL UNIT OR BY EXPANDING THE EXISTING UNIT BY PURCHASE OF NEW PLANT AND MACHINERY, AND PUTTING IT TO USE FOR THE PURPOSE OF BUSINESS. THE PROVISO TO CLA USE [II] OF THE SAID SECTION MAKES IT CLEAR THAT ONLY 50% OF THE 20% WOULD BE ALLOWABLE, IF THE NEW PLANT AND MACHIN ERY SO ACQUIRED IS PUT TO USE FOR LESS THAN 180 DAYS IN A FINANCIAL YEAR. HOWEVER, IT NOWHERE RESTRICTS THAT THE BALANC E 10% WOULD NOT BE ALLOWED TO BE CLAIMED BY THE ASSESSEE IN THE NEXT ASSESSEMENT YEAR. 9. THE LANGUAGE USED IN CLAUSE (IIA) OF THE SAID SE CTION CLEARLY PROVIDES THAT 'A FURTHER SUM EQUAL TO 20% O F THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED 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 OF THE PROVISO REFERRED TO ABOVE, ONLY 10% CAN. BE CLAIMED IN 9 I.T.A. NO.206/MDS/16 ONE YEAR, IF PLANT AND MACHINERY IS PUT TO USE FOR LESS THAN 180 DAYS SAID FINANCIAL YEAR. VERY PURPOSE OF INSERTION OF CLAUSE (IIA) WOULD BE DEFEATED BECAUSE IT PROVIDES FOR 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 INTERPRETATIO N SO AS TO BENEFIT THE ASSESSEE. IN THIS CASE, THE INTENTI ON OF THE LEGISLATION IS ABSOLUTELY CLEAR, THAT THE ASSES SEE SHALL BE ALLOWED CERTAIN ADDITIONAL BENEFIT, WHICH WAS RESTRICTED BY THE PROVISO TO ONLY HALF OF THE SAME BEING GRANTED IN ONE ASSESSMENT YEAR, IF CERTAIN CONDITIO N WAS NOT FULFILLED. BUT, THAT, IN OUR CONSIDERED VIEW, WOULD NOT RESTRAIN THE ASSESSEE FROM CLAIMING THE BALANCE OF THE BENEFIT IN THE SUBSEQUENT ASSESSMENT YEAR. THE TRIBUNAL, IN OUR VIEW, HAS RIGHLY HELD, THAT ADDITI ONAL DEPRECIATION ALLOWED UNDER SECTION 32(1)(IIA) OF TH E ACT IS A ONE TIME BENEFIT TO ENCOURAGE INDUSTRIALIZATIO N, AND PROVISIONS RELATED TO IT HAVE TO BE CONSTRUED REASO NABLY, LIBERALLY AND PURPOSIVELY, TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING ADDITIONAL ALLOWANCE. WE ARE IN FULL AGREEMENT WITH SUCH OBSERVATIONS MADE BY 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 CONSIDERATION. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO ALLOW BALANCE 50% OF DEPRECIATION, NAMELY, 10% OF A DDITIONAL DEPRECIATION DURING THE YEAR UNDER CONSIDERATION. 6. FURTHERMORE, THE PARLIAMENT BY FINANCE ACT, 2015 INTRODUCED THIRD PROVISO TO SECTION 32(1)(II) OF TH E ACT PROVIDING FOR CARRY FORWARD OF THE BALANCE 50% OF DEPRECIATION IN THE IMMEDIATELY SUCCEEDING PREVIOUS YEAR IN RESPECT OF THE ASSET. PROBABLY, THE PARLIAMENT MIGHT HAVE TAKEN THE DECISION TO INCORPO RATE THIRD PROVISO TO SECTION 32(1)(II) AFTER CONSIDERING THE CONFLICTING JUDICIAL 10 I.T.A. NO.206/MDS/16 OPINIONS ON THE SUBJECT. WHATEVER MAY BE THE REASO NS, IN VIEW OF THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN AUTOMOTIVE COACHES & COMPONENTS LTD. (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FO R REMAINING 10% OF DEPRECIATION DURING THE YEAR UNDER CONSIDERATION . ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE BALANCE 50% DEPREC IATION NAMELY 10% OF ADDITIONAL DEPRECIATION DURING THE YEAR UNDE R CONSIDERATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 7 TH APRIL, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 7 TH APRIL, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.