Assistant Commissioner of Income-tax, V. Shri Madhavan Nanu Pillai, Kolhapur

ITA 2222/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1052 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSHANT S PHADNIS
• Assessee Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Depreciation; Rectification of order; Audit objection; Additional depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 2222 /PN/201 3 / ASSESSMENT YEAR : 200 9 - 1 0 THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE 2, KOLHAPUR . / APPELLANT VS. SHRI MADHAVAN NANU PILLAI, PLOT NO.17, MANE COLONY, SAMRAT NAGAR, KOLHAPUR . / RESPONDENT PAN: ABKPP3589J / APPELLANT BY : S HRI SUSHANT S PHADNIS / RESPOND ENT BY : / RESPOND ENT BY : S HRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 1 3 .0 8 .2015 / DATE OF PRONOUNCEMENT: 23 .0 9 .2015 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) , KOLHAPUR , DATED 11 . 1 0 .201 3 RELATING TO ASSESSMENT YEAR 200 9 - 1 0 PASSED U NDER SECTION 154 OF THE INCOME - TAX ACT, 1961. 2. THE REVENUE HAS RAIS ED THE FOLLOWING GROUNDS OF APPEAL: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE C IT (A), HAS ERRED IN DELETING THE DISALLOWANCE MADE OF RS.24 , 54 , 934/ - ON ACCOUNT OF HAS ERRED IN DELETING THE DISALLOWANCE MADE OF RS.24 , 54 , 934/ - ON ACCOUNT OF CLAIM OF ADDITIONAL DEPRECIATION U / S . 32(1)(IIA) OF THE I . T . ACT . ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE CIT(A) ERRED IN TREATING THAT THE ISSUE OF CLAIM OF ADDITIONAL DEPRECIATION U/S.32(1)(IIA) OF THE I . T.ACT , 1961 IS NOT COVERED B Y PROVISIONS OF SECTION 154 OF THE I . T . ACT , 1961 BEING DEB ATABLE, WHEN THE MISTAKE OF INCORRECT CLAIM IS CLEARLY APPARENT ON PLAIN READING OF SECTION 32(1)(IIA) OF THE INCOME TAX ACT , 1961 . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) HAS ERRED IN NOT APPRECIATING THE INHERENT ASPECT OF THE P ROVISIONS OF SECTION 32((1)(IIA) OF THE ACT THAT , WITH INSERTION OF THE TERM ' . . . . A C TUAL COST . .. . ' (AND NOT WDV), THE ADDITIONAL DEPRECIATION IS ALLOWABLE ONLY IN THE FIRST Y EAR . 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) HAS ERRED IN REL Y ING ON THE DECISION IN THE CASE OF SIDHRAMAPPA ANDANNAPPA MANVI VS. C I T (1952) 21 I TR 333 ( BO M . ) WHEN NO SUCH DEBATABLE ISSUE IS INVOLVED. 5. THE APPELLANT PRAYS THAT THE ORDER OF THE COMMISSIONER OF I NCOME TAX ( APPEALS) , KOLHAPUR B E V ACATED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD , ALTER, AMEND, RAISE , ANY OF THE ABOVE , OR 6. THE APPELLANT CRAVES LEAVE TO ADD , ALTER, AMEND, RAISE , ANY OF THE ABOVE , OR ANY OTHER GROUND RAISED . 3. THE ISSUE RAISED BY THE REVENUE IN THE PRESENT APPEAL IS AGAINST THE DELETION OF DISAL LOWANCE MADE B Y THE ASSESSING OFFICER UNDER SECTION 154 OF THE ACT, ON ACCOUNT OF CLAIM OF ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT AT RS. 24,54,934/ - . 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 30.12.2011, UNDER WHICH THE ASSESSEE WAS ALLOWED ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT. THEREAFTER, AUDIT OBJECTIONS WERE ISSUED BY THE AUDIT DEPARTMENT POINTING OUT THAT THE ADDITIONAL DEP RECIATION WAS AVAILABLE ONLY IN THE YEAR IN WHICH THE NEW PLANT & MACHINERY WAS FIRST PUT TO USE. HOWEVER, IN THE CASE OF THE ASSESSEE, IT HAD CLAIMED EXCESS DEPRECIATION ON THE WDV OF THE PLANT & MACHINERY AND AS AGAINST ACTUAL DEPRECIATION AVAILABLE AT RS. 41,47,412/ - , DEPRECIATION CLAIMED BY THE ASSESSEE WAS RS. 66,02,346/ - , RESULTING IN EXCESS DEPRECIATION OF RS.24,54,934/ - . THE ASSESSING OFFICER CONSEQUENT THERETO, ISSUED NOTICE UNDER SECTION 154 OF THE ACT . I N RESPONSE TO THE SAID NOTICE, THE ASSESSE E F URNISHED WRITTEN SUBMISSIONS WHICH ARE REPRODUCED UNDER PARA 3 AT PAGES 2 AND 3 OF THE ORDER PASSED UNDER SECTION ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 3 154 OF THE ACT. AS PER THE SAID SUBMISSIONS, THE ASSESSEE CLAIMED THAT THE ADDITIONAL DEPRECIATION WAS AVAILABLE FOR THE ASSESSMENT YEAR R ELEVANT TO THE FINANCIAL YEAR IN WHICH THE NEW MACHINERY WAS INSTALLED AND SUCH ADDITIONAL DEPRECIATION WAS ALSO AVAILABLE TO THE ASSESSEE IN THE SUCCEEDING YEARS TILL THE WDV OF THE MACHINERY BECAME NIL. AS PER THE ASSESSEE, SECTION PROVIDED THAT WHERE T HE NEW MACHINERY WAS INSTALLED AFTER 31.03.2005, THEN ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT WAS AVAILABLE TO THE ASSESSEE IN FURTHERANCE TO THE NORMAL DEPRECIATION AND THE SAME WAS NOT ALLOWABLE ONLY FOR THE YEAR OF INSTALLATION. THE ASSESSEE STATED THAT THE ADDITIONAL DEPRECIATION WAS ALLOWED NOT ONLY FOR ONE YEAR BUT ALSO FOR SUCCESSIVE ASSESSMENT YEARS AND HENCE, THE SAME WAS ALLOWABLE ON THE WDV. THE ASSESSING OFFICER REJECTING THE EXPLANATION OF THE ASSESSEE, HELD THAT THE ADDIT IONAL DEPRECIATION IS ALLOWABLE ONLY @ 20% ON THE COST OF THE MACHINERY IN THE YEAR THE SAME WAS PURCHASED. SINCE THE ASSESSEE HAD CLAIMED EXCESS DEPRECIATION, THE MISTAKE BEING APPARENT FROM RECORD, WAS RECTIFIED UNDER THE PROVISIONS OF SECTION 154 OF TH E ACT AND THE ADDITIONAL DEPRECIATION @ 20% WAS DENIED TO THE ASSESSEE. 5. IN APPEAL, THE CONTENTION OF THE ASSESSEE WAS THAT SINCE THE ISSUE WAS DEBATABLE ISSUE , THE SAME COULD NOT BE RECTIFIED UNDER SECTION 154 OF THE ACT. THE CIT(A) VIDE PARA 5 OBSERV ED AS UNDER: - 5. I HAVE GONE THROUGH THE RECTIFICATION ORDER AND SUBMISSIONS OF THE APPELLANT. ADDITIONAL DEPRECIATION IS ALLOWABLE UNDER SECTION 32(1)(IIA) OF THE ACT. AS PER THE APPELLANT, THE ADDITIONAL DEPRECIATION WILL BE AVAILABLE BEYOND FIRST YEA R ALSO LIKE THE NORMAL DEPRECIATION AND THE ONLY CONDITION IS THAT THE PLANT OR MACHINERY HAS BEEN ACQUIRED AFTER 31/3/2005. THE DEPARTMENTS STAND IN THESE CASES HAS BEEN THAT THE ADDITIONAL DEPRECIATION IS AVAILABLE ONLY IN THE FIRST YEAR OF ACQUIRING T HE PLANT OR MACHINERY. THE ISSUE IS PENDING AT VARIOUS APPELLATE LEVELS. SUCH A DEBATABLE ISSUE CANNOT BE DEALT WITH UNDER SECTION 154 WHICH IS A PROVISION MEANT TO RECTIFY MISTAKES APPARENT FROM RECORD. IT HAS BEEN HELD IN THE CASE OF SIDHRAMAPPA ANDAN NAPPA MANVI V/S CIT (SUPRA) THAT THE DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM RECORD. THERE ARE SEVERAL DECISIONS SIMILAR TO THIS. THEREFORE, THE RECTIFICATION ORDER UNDER SECTION 154 IS CANCELLED. ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 4 6. THE REVENUE IS IN APPEA L AGAINST THE ORDER OF CIT(A). 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AFTER TAKING US THROUGH THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT POINTED OUT T HAT SECTION USES THE WORD ACTUAL COST, ON WHICH THE ADDITIONAL DEPRECIATION IS ALLOWABLE I.E. THE SAME IS TO BE ALLOWED IN THE FIRST YEAR OF INSTALLATION. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE STRESSED THAT THE INTENTION OF LAW WAS CLEAR THAT THE DEDUCTION UNDER SECTION 32(1)(IIA) OF THE ACT WAS AVAILABLE IN THE F IRST YEAR OF INSTALLATION OF PLANT & MACHINERY. IT WAS FURTHER POINTED OUT BY HIM THAT WHERE LAW IS CLEAR AND THE SAME HAS NOT BEEN APPLIED BY THE ASSESSING OFFICER, THEN THE SAME IS MISTAKE APPARENT FROM RECORD, WHICH COULD BE RECTIFIED UNDER SECTION 154 OF THE ACT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER REFERRING TO PARA 5 OF THE ORDER OF CIT(A), POINTED OUT THAT THE RELIANCE PLACED UPON BY THE CIT(A) ON THE RATIO LAID DOWN IN SIDHRAMAPPA ANDANNAPPA MANVI V/S CIT (1952) 21 ITR 3 33 RATIO LAID DOWN IN SIDHRAMAPPA ANDANNAPPA MANVI V/S CIT (1952) 21 ITR 3 33 (BOM) , IS INCORRECT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE RATIO LAID DOWN IN ITO VS. ASHOK TEXTILES LTD. (1961) 41 ITR 732 ( SC ) FOR THE PROPOSITION THAT WHERE THERE IS FAILURE TO APPRECIATE THE MANDATORY PROVIS IONS OF THE ACT, RECTIFICATION OF SUCH MISTAKE COULD BE CARRIED OUT BY THE AUTHORITIES. FURTHER, RELIANCE WAS PLACED ON THE RATIO LAID DOWN IN CIT VS. PEIRCE LESLIE & CO. LTD. (1997) 227 ITR 759 (MAD) AND ADDL. CIT V. INDIA TIN INDUSTRIES (P) LTD. ( 1987 ) 166 ITR 454 ( KARN ) . 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN REPLY, POINTED OUT THAT THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 32(1)(IIA) OF THE ACT IN THE SUBSEQUENT YEARS TO THE YE AR OF PURCHASE OF PLANT & MACHINERY, WAS A DEBATABLE ISSUE. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 5 FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN IN DY. CIT V. COSMO FILMS LTD. (2012) 13 ITR 340 (DELHI)(TRIB.) AND IN ASST. COMMISSIONER OF INCOME TAX V. SIL INVESTMENT LTD. (2012) 73 DTR 233 (DEL.)(TRIB.) . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT WHERE THE PLANT & MACHINERY HAS BEEN ACQUIRED BY THE ASSESSEE IN PERIOD LESS THAN 180 DAYS, THEN UNDER THE PROVISIONS OF SECTION 32(1)(IIA) OF THE ACT , THE ASSESSEE WAS ENTITLED TO CLAIM OF ADDITIONAL DEPRECIATION @ 10% AND THE BALANCE ADDITIONAL DEPRECIATION @ 10% WAS ALLOWABLE TO THE ASSESSEE IN THE SUCCEEDING YEARS I.E. THE ADDITIONAL DEPRECIATION BEING ALLOWED @ 20% . THE LEARNED AUTHORIZED REPRESEN TATIVE FOR THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS ON RECORD IN THIS REGARD. THE CASE OF THE ASSESSEE BEFORE US WAS THAT WHERE THERE WAS DEBATABLE ISSUE, NO RECTIFICATION UNDER SECTION 154 OF THE ACT COULD BE CARRIED OUT. IN THE SAID WRITTEN SUBMISSIO NS, THE ASSESSEE HAD STATED THAT IT HAD CLAIMED ADDITIONAL DEPRECIATION @ 20% ON THE COST OF MACHINERY WHICH WAS PURCHASED AFTER 31.03.2005 I.E. IN THE YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2009 - 10 . THE ASSESSEE HAD CLAIMED THE DEDUCTION AT RS. 24,54,934/ - , WHICH WAS 20% OF RS. 1,22,74,673/ - . ANOTHER CONTENTION RAISED BY THE ASSESSEE IN THE WRITTEN SUBMISSIONS IS THAT THE ADDITIONAL DEPRECIATION WAS AVAILABLE FOR THE ASSESSMENT YEAR IN WHICH THE NEW MACHINERY WAS INSTALLED AND SUCH DEPRECIATION WAS AVAILAB LE TO THE ASSESSEE IN THE SUCCEEDING YEARS TILL WDV OF THE MACHINERY BECAME NIL. IT IS FURTHER STATED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE MACHINERY WAS ACQUIRED DURING 01.04.2005 TO 31.03.2008 AND WAS INSTALLED AFTER 01.04.2 005. HOWEVER, DURING THE COURSE OF ARGUMENTS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT WHERE THE PLANT & MACHINERY WAS ACQUIRED IN THE ACCOUNTING PERIOD FOR LESS THAN 180 DAYS AND ONLY 10% OF THE COST OF PLANT & MACHINER Y WAS AVAILABLE TO THE ASSESSEE AS ADDITIONAL DEPRECIATION, IT WAS ENTITLED TO THE BALANCE CLAIM OF ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 6 ADDITIONAL DEPRECIATION TO THE EXTENT OF 10% IN THE NEXT SUCCEEDING YEARS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT THE CLAIM MADE BY THE ASSESSEE AT RS.24,54,934/ - I.E. 20% OF THE COST OF MACHINERY AT RS. 1,22,74,673/ - WAS TO BE RESTRICTED TO 10% OF THE COST OF MACHINERY, TO BE ALLOWED AS ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT. 9. WE HAVE HEARD THE RIV AL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE CLAIM OF ADDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT. UNDER THE PROVISIONS OF SAID SECTION, THE ASSESSEE IS ENTITLED TO CLAIM OF ADDITIONA L DEPRECIATION EQUAL TO 20% OF ACTUAL COST OF SUCH MACHINERY OR PLANT, IN CASE OF ACQUISITION OR INSTALLATION OF ANY NEW MACHINERY OF PLANT, OTHER THAN SHIPS AND AIRCRAFTS, AFTER 31 ST DAY OF MARCH, 2005, BY THE ASSESSEE ENGAGED IN THE BUSINESS OF MANUFACTU RE OR PRODUCTION OF ANY ARTICLE OR THING OR IN THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWER. IT IS FURTHER PROVIDED UNDER THE SAID GENERATION AND DISTRIBUTION OF POWER. IT IS FURTHER PROVIDED UNDER THE SAID CLAUSE THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF ANY MACHINERY OR PLANT WHICH , BEFORE ITS INSTALLATION BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA BY ANY OTHER PERSON OR ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREMISES OR ANY RESIDENTIAL ACCOMMODATION. FURTHER, NO SUCH DEDUCTION OF ADDITIONAL DEPRECIATION IS ALLOWABLE AGAINST ANY OFFICE APPLI ANCES OR ROAD TRANSPORT VEHICLES OR ANY PLANT & MACHINERY, THE WHOLE COST OF WHICH WAS ALLOWED AS DEDUCTION, IN COMPUTING INCOME CHARGEABLE UNDER THE HEAD PROFITS & GAINS OF THE BUSINESS OF ANY PREVIOUS YEAR. THE REQUIREMENT OF THE SECTION IS THAT NEW PLA NT OR MACHINERY, WHICH HAS NOT BEEN USED BY ANY OTHER PERSON, AND WHICH HAS NOT BEEN INSTALLED IN ANY OFFICE OR RESIDENTIAL PREMISES, IS TO BE ACQUIRED OR INSTALLED AFTER 31 ST DAY OF MARCH, 2005, BY THE ASSESSEE, WHICH IS ENGAGED IN THE BUSINESS OF MANUFAC TURE O R PRODUCTION OF ARTICLE OR THING. THE ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 7 ASSESSEE BEFORE US IS ENGAGED IN THE MANUFACTURE OF C.I. CASTINGS AND HAD ACQUIRED THE MACHINERY DURING THE PERIOD 01.04.2005 TO 31.03.2008 . THE ASSESSEE IN THE RETURN OF INCOME HAD CLAIMED DEPRECIATION @ 20% O N THE WDV OF PLANT & MACHINERY OF RS. 1,22,74,673/ - . THE SAID DEPRECIATION WAS ALLOWED TO THE ASSESSEE WHILE COMPLETING ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 30.12.2011 . THEREAFTER, AUDIT OBJECTION WAS RAISED AGAINST THE ASSESSEE IN RESPECT OF CLAIM OF DEPRECIATION RESULTING IN SHORT LEVY OF TAX. ACCORDINGLY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 154 OF THE ACT. THE ASSESSING OFFICER POINTED OUT THAT THE ADDITIONAL DEPRECIATION HAS BEEN WRONGLY CLAIMED BY THE ASSESSEE. IN REPLY, THE ASSESSEE SUBMITTED THAT SINCE IT HAD PURCHASED MACHINERY AFTER 31.03.2005 AND THE SAME WAS NOT OFFICE APPLIANCE, HENCE, IT WAS ENTITLED TO THE CLAIM OF ADDITIONAL DEPRECIATION @ 20% . THE PLEA OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE SAID ADDITIONAL DEPRECIATION WAS AVAILABLE FOR THE ASSESSMENT YEAR IN WHICH THE NEW MACHINERY WAS INSTALLED AND WAS ALSO AVAILABLE TO THE ASSESSEE IN SUCCEEDING YEARS TILL THE WDV VALUE OF MACHINERY BECAME NIL. THE ASSESSING OFFICER HOWEVER, REJE CTED THE CLAIM OF THE ASSESSEE AND HELD THE ASSESSEE TO HAVE CLAIMED EXCESS DEPRECIATION AND CONSEQUENTLY, THE INCOME WAS REVISED IN THE HANDS OF THE ASSESSEE AFTER MAKING AN ADDITION ON ACCOUNT OF EXCESS DEPRECIATION OF RS. 24,54,934/ - . THE CIT(A) ALLOWED THE CLAIM OF ASSESSEE BY OBSERVING THAT WHETHER THE ADDITIONAL DEPRECIATION WAS AVAILABLE ONLY IN THE FIRST YEAR OF ACQUIRING THE PLANT & MACHINERY OR NOT, WAS A DEBATABLE ISSUE AND THE SAME COULD NOT BE DEALT WITH UNDER SECTION 154 OF THE ACT. 10. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD CLAIMED ADDITIONAL DEPRECIATION ON ACCOUNT OF PLANT & MACHINERY PURCHASED BY THE ASSESSEE IN THE PRECEDING YEAR . S INCE THE SAID MACHINERY WAS PURCHASED FOR LESS THAN 180 DAYS IN ASSESSMENT YEAR 2008 - 09 , THE ADDITIONAL DEPRECIATION WAS ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 8 CLAIMED @ 20% . HOWEVER, IN THE YEAR UNDER APPEAL I.E. ASSESSMENT YEAR 2009 - 10 , THE ASSESSEE FURTHER CLAIMED ADDITIONAL DEPRECIATION @ 20% ON THE WDV OF PLANT & MACHINERY. THOUGH THE ASSESSEE RAISED SEVERAL OBJECTIONS TO THE IN ITIATION OF PROCEEDINGS UNDER SECTION 154 OF THE ACT AND ALSO ITS CLAIM OF DEDUCTION @ 20% ON THE WDV OF ASSETS, BEFORE CONCLUSION OF HEARING, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FAIRLY ADMITTED THAT WHERE THE PLANT & MACHINERY WAS ACQUI RED IN THE ACCOUNTING PERIOD FOR LESS THAN 180 DAYS, ONLY 10% OF THE COST OF PLANT & MACHINERY WAS AVAILABLE TO THE ASSESSEE AS ADDITIONAL DEPRECIATION IN THE FIRST YEAR AND BALANCE CLAIM OF ADDITIONAL DEPRECIATION TO THE EXTENT OF 10% WAS TO BE ALLOWED IN THE NEXT SUCCEEDING YEAR. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ALSO SUBMITTED THAT THE CLAIM MADE BY THE ASSESSEE AT RS. 24,54,934/ - @ 20% ON COST OF MACHINERY WAS TO BE RESTRICTED TO 10% ON COST OF MACHINERY, WHICH IS TO BE ALLOWED AS A DDITIONAL DEPRECIATION UNDER SECTION 32(1)(IIA) OF THE ACT . I N VIEW OF THE P ROVISIONS OF LAW, WHEREIN ADDITIONAL DEPRECIATION IS ALLOWABLE TO THE ASSESSEE TO THE EXTENT OF 20% ON THE COST OF PLANT & MACHINERY AND WHERE THE ASSESSEE HAS PURCHASED AN ASSET IN THE PRECEDING YEAR AND HAS BEEN ALLOWED ONLY 10% OF THE COST OF ASSET AS ADDITIONAL DEPRECIATION, THE CORRECT POSITION OF LAW IS THAT BALANCE 10% OF ADDITIONAL DEPRECIATION IS TO BE ALLOWED TO THE ASSESSEE . W HERE THE ASSESSING OFFICER FAILED TO APPLY T HE CORRECT PROVISIONS OF LAW , THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS AMENABLE TO RECTIFICATION UNDER SECTION 154 OF THE ACT. IN VIEW THEREOF, WE UPHOLD THE INVOKING OF PROVISIONS OF SECTION 154 OF THE ACT AGAINST THE ASSESSEE . FURTHER, I N VIEW OF THE CONCESSION MADE BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE , WHERE THE ASSESSEE WAS ONLY ENTITLED TO 10% OF THE COST OF MACHINERY TO BE ALLOWED AS ADDITIONAL DEPRECIATION IN THE INSTANT ASSESSMENT YEAR, SINCE THE BALANCE 10% OF COST OF MACHINERY HAS BEEN ALLOWED AS ADDITIONAL DEPRECIATION IN THE PRECEDING YEAR, WE REVERSE THE ORDER OF CIT(A) ITA NO. 2222 /PN/201 3 SHRI MADHAVAN NANU PILLAI 9 AND DIRECT THE ASSESSING OFFICER TO ALLOW DEPRECIATION @ 10% OF THE COST OF MACHINERY AT RS.1,22,74,673/ - AS ADDITIONAL DEPRECIATION ON PLAN T & MACHINERY PURCHASED BY THE ASSESSEE IN THE PRECEDING YEAR. REVERSING THE ORDER OF CIT(A), WE ALLOW THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 1 1 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER P RONOUNCED ON THIS 23 RD D AY OF SEPTEMBER , 201 5 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD SEPTEMBER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / TH E APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A), KOLHAPUR ; 3. ( ) / THE CIT (A), KOLHAPUR ; 4. / THE CIT - I/II, KOLHAPUR /CIT ( CENTRAL ), PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE