DCIT, CHENNAI V. ABI Showtatech India Ltd., CHENNAI

ITA 2316/CHNY/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7845 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 31-12-2013
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Depreciation; Additional depreciation; Permanent establishment; Advance ruling; Unabsorbed depreciation
• Section: 14A; 80IB; 10B; 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NOS.157 & 158/MDS/2014 / ASSESSMENT YEARS : 2008-09 & 2009-10 M/S ABI SHOWTECH(INDIA) LTD 67, CHAMIERS ROAD CHENNAI 600 028 VS. THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(1) CHENNAI [PAN AABCA 8160 B ] ( &' / APPELLANT) ( ()&' /RESPONDENT) ./ I.T.A.NO. 2316/MDS/2013 / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I(1) CHENNAI VS. M/S ABI SHOWTECH(INDIA) LTD 67, CHAMIERS ROAD CHENNAI 600 028 ( &' / APPELLANT) ( ()&' /RESPONDENT) ASSESSEE BY : SHRI R.VIJAYARAGHAVAN, ADVOCATE DEPARTMENT BY : SHRI PATHLAVATH PEERYA, CIT / DATE OF HEARING : 07 - 01 - 2016 / DATE OF PRONOUNCEMENT : 04 - 0 3 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER BOTH THE ASSESSEE AND REVENUE FILED APPEALS FOR ASSESSMENT YEAR 2009-10 AND THE ASSESSEE ALSO FILE D APPEAL FOR ITA NO.157 & 158/14 2316/13 :- 2 -: ASSESSMENT YEAR 2008-09. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN ALL THE APPEALS, WE HEARD THEM TOG ETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. LET US FIRST TAKE THE REVENUES APPEAL FOR ASSESSME NT YEAR 2009-10 IN I.T.A.NO. 2316/MDS/2013. 3. THE FIRST GROUND OF APPEAL IS WITH REGARD TO DEDUCT ION CLAIMED U/S 10B OF THE ACT. 4. SHRI PATHLAVATH PEERYA, LD. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION OF ` 15,28,74,559/- U/S 10B OF THE ACT. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM TO THE EXTENT OF ` 7,59,27,232/-. ACCORDING TO THE LD. DR, ON ACCOUNT OF FREIGHT AND HANDLING CHARGES, THE ASSES SEE INCURRED THE EXPENDITURE OF ` 7,59,27,232/-. THIS EXPENDITURE WAS INCURRED OUTS IDE INDIA, THEREFORE, IT NEEDS TO BE REDUCED FROM THE E XPORT TURNOVER. THE ASSESSEE HAS ALSO INCURRED EXPENDITURE OF ` 1,13,57,313/- IN FOREIGN CURRENCY TOWARDS PAYMENT OF COMMISSION. THE ASSES SEE HAS ALSO REDUCED A SUM OF ` 25,93,933/- ON ACCOUNT OF EXPORT REJECTIONS IN COMPUTING DEDUCTION U/S 10B OF THE ACT. REFERRING TO FREIGHT AND HANDLING CHARGES, THE LD. DR SUBMITTED THAT FREIGHT CHARGES, TELECOMMUNICATION CHARGES, INSURANCE CHARGES CANNOT FORM PART OF THE EXPORT TURNOVER. REFERRING TO EXPLANATION 2 TO SEC . 10B OF THE ACT, THE ITA NO.157 & 158/14 2316/13 :- 3 -: LD. DR SUBMITTED THAT EXPORT TURNOVER DOES NOT INCL UDE FREIGHT, TELECOMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF ARTICLES OR THINGS OR SOFTWARE OUTSIDE INDIA. IN V IEW OF THIS EXPLANATION 2, ACCORDING TO THE LD. DR, FREIGHT AND HANDLING CH ARGES CANNOT FORM PART OF EXPORT TURNOVER, THEREFORE, THE CIT(A) IS N OT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER NOT TO REDUCE THE S AME FROM EXPORT TURNOVER. REFERRING TO THE ORDER OF THE CIT(A), TH E LD. DR POINTED OUT THAT THE CIT(A) WITHOUT VERIFYING THE NATURE OF THE EXPENDITURE FOUND THAT ` 1,26,24,256/- AMOUNTS TO DOUBLE DEDUCTION WHICH IS NOT CALLED FOR. UNLESS AND UNTIL THE NATURE OF EXPENDITURE IS VERIFIED, ACCORDING TO THE LD. DR, THE CIT(A) OUGHT NOT HAVE DIRECTED THE ASSESSING OFFICER TO REDUCE THE FREIGHT AND HANDLING CHARGES TO THE EXTE NT OF ` 7,17,92,953/- FROM THE EXPORT TURNOVER. 5. ON THE CONTRARY, SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED WHILE COMPUTING DEDUCTION U/S 1 0B, THE ASSESSING OFFICER MADE A DISALLOWANCE OF ` 7,17,92,953/- TOWARDS FREIGHT AND HANDLING CHARGES. ACCORDING TO THE LD. COUNSEL, A SUM OF ` 1,26,24,256/- WAS REDUCED FROM THE FOB VALUE OF THE EXPORT, THEREFORE, REDUCTION OF SIMILAR AMOUNT FROM THE EXP ORT TURNOVER AMOUNTS TO DOUBLE DEDUCTION. REFERRING TO THE PACK ING MATERIAL AND OUTWARD FREIGHT CHARGES, THE LD. COUNSEL SUBMITTED THAT THEY DO NOT FALL UNDER THE EXPRESSION FREIGHT AND TELECOMMUNICATION CHARGES WITHIN ITA NO.157 & 158/14 2316/13 :- 4 -: THE MEANING OF EXPLANATION 2 TO SEC. 10B OF THE ACT . THEREFORE, THE CIT(A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER T O REDUCE THE SAME FROM THE EXPORT TURNOVER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH EXPLANATION 2 TO SEC. 10B OF THE ACT . EXPORT TURNOVER IS DEFINED IN EXPLANATION 2(III) TO SEC. 10B OF THE ACT AS FOLLOWS: (III) 'EXPORT TURNOVER' MEANS THE CONSIDERATION IN RESPECT OF EXPORT [BY THE UNDERTAKING] OF ARTICLES OR THINGS OR COMPUTER SOFTWARE RECEIVED IN, OR BROUGHT INTO, INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE IN ACCORDANCE WITH SUB- SECTION (3), BUT DOES NOT INCLUDE FREIGHT, TELECOMMUNICATION CHA RGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF THE ARTIC LES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA OR EXPENSES, IF ANY, INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA; 7. FREIGHT, TELECOMMUNICATION CHARGES, INSURANCE ATTRI BUTABLE TO DELIVERY OF THE ARTICLES OR THINGS, COMPUTER SOFTWA RE OUTSIDE INDIA OR EXPENSES IF ANY, INCURRED IN FOREIGN EXCHANGE IN PR OVIDING TECHNICAL SERVICES OUTSIDE INDIA ARE EXCLUDED FROM THE EXPORT TURNOVER. IN THE CASE BEFORE US, THE ASSESSEE HAS CLAIMED EXPENDITU RE OF ` 7,17,92,953/- TOWARDS FREIGHT AND HANDLING CHARGES. THE CIT(A) FOUND THAT THE PACKING MATERIAL AND OUTWARD FREIGHT CHARG ES DO NOT FALL UNDER THE EXPRESSION FREIGHT AND TELECOMMUNICATION CHARG ES. FROM THE ITA NO.157 & 158/14 2316/13 :- 5 -: MATERIAL AVAILABLE ON RECORD, IT IS NOT KNOWN THE N ATURE OF FREIGHT CHARGES AND HANDLING CHARGES INCURRED BY THE ASSES SEE. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD. DR, THE NATURE OF T HE PAYMENT NEEDS TO BE VERIFIED. THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT WHEN THE FREIGHT AND HANDLING CHARGES ARE EXCLUDED FROM THE EXPORT TURNOVER, THE SAME HAS TO BE EXCLUDED FROM THE TOTAL TURNOVER ALSO. IN OTHER WORDS, BOTH NUMERATOR AND DENOMINATOR SHALL BE OF T HE SAME FACTOR. ONCE IT IS EXCLUDED FROM THE EXPORT TURNOVER, THE S AME NEEDS TO BE EXCLUDED FROM THE TOTAL TURNOVER ALSO. HOWEVER, TH E ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE NEEDS TO BE V ERIFIED BY THE ASSESSING OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF DISALLOWANCE OF FREIGHT AND HANDLING CHARGES OF ` 7,17,92,953/- IS REMITTED BACK TO THE FILE OF THE A SSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AF RESH IN THE LIGHT OF THE PROVISIONS OF EXPLANATION 2(III) TO SEC. 10B OF THE ACT AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISALLO WANCE OF COMMISSION PAID IN FOREIGN CURRENCY TO THE EXTENT O F ` 1,13,57,313/-. 9. SHRI PATHLAVATH PEERYA, LD. DR SUBMITTED THAT THE ASSESSEE HAS PAID COMMISSION TO THE AGENT FOR IDENTIFYING TH E SOURCE FOR HIGH ITA NO.157 & 158/14 2316/13 :- 6 -: QUALITY SCRAP WHICH WAS USED AS RAW MATERIAL. ACC ORDING TO THE LD. DR, IDENTIFYING THE SOURCE OF RAW MATERIAL FOR FOUN DRY INPUT AND TO INTIMATE THE POSSIBLE SUPPLIERS OF RAW MATERIAL ARE IN THE NATURE OF TECHNICAL SERVICES, THEREFORE, THE PAYMENT OF COMMI SSION DOES NOT FORM PART OF THE EXPORT TURNOVER. 10. ON THE CONTRARY, SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTIFYING THE SOURCE FOR HIGH QUALITY SCRAP FOR FOUNDRY AND INTIMATE THE POSSIBLE SUPPLIERS OF RAW MATERIAL CANNOT BE CONSIDERED TO BE PROVIDING TECHNICAL SERVICES OU TSIDE INDIA, THEREFORE, THE SAME CANNOT BE EXCLUDED FROM THE TOT AL TURNOVER. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AD MITTEDLY, THE ASSESSEE PAID A SUM OF ` 1,13,57,313/- TO M/S BIGGLESWADE LTD. IN FOREIGN CURRENCY TOWARDS COMMISSION. THE ASSESSEE CLAIMED THE ABOVE PAYMENT OF ` 1,13,57,313/- AS EXPENDITURE. THE CIT(A) BY PLACING HIS RELIANCE ON THE DECISION OF SPECIAL BEN CH OF THIS TRIBUNAL IN ZYLOG SYSTEMS LTD VS ITO 128 ITD 105, FOUND THAT T HE SAME CANNOT BE DISALLOWED WHILE COMPUTING DEDUCTION U/S 80IB O F THE ACT. 12. WE HAVE CAREFULLY GONE THROUGH THE DECISION OF THE SPECIAL BENCH IN THE CASE OF ZYLONG SYSTEMS LTD (SUPRA). T HE ASSESSEE BEFORE THE SPECIAL BENCH OF THIS TRIBUNAL WAS ENGAG ED IN THE BUSINESS ITA NO.157 & 158/14 2316/13 :- 7 -: OF DEVELOPMENT OF SOFTWARE. THE ASSESSEE INCURRED EXPENDITURE OUTSIDE INDIA IN CONNECTION WITH DEVELOPMENT OF SOF TWARE BY THE EMPLOYEES OF THE ASSESSEE-COMPANY. THEREFORE, THE TRIBUNAL FOUND THAT A PERSON CANNOT PROVIDE SERVICES TO HIMSELF. ACCORDINGLY, IT WAS FOUND THAT THE SAID EXPENDITURE CANNOT BE EXCLUDED FROM THE EXPORT TURNOVER FOR COMPUTING DEDUCTION U/S 10B OF THE AC T. IN THE CASE BEFORE US, IT IS NOT THE CASE OF THE ASSESSEE THAT EXPENDITURE WAS INCURRED FOR THE EMPLOYEES OF THE ASSESSEE FOR IDE NTIFYING THE SOURCE OF THE RAW MATERIAL. THE SOURCE OF RAW MATERIAL WA S IDENTIFIED BY THE THIRD PARTIES AND THE ASSESSEE HAS ADMITTEDLY PAID COMMISSION. THE QUESTION ARISES FOR CONSIDERATION IS IDENTIFYING SO URCE OF RAW MATERIAL AMOUNTS TO PROVIDING TECHNICAL SERVICES OR NOT. THI S FACT WAS NOT CONSIDERED EITHER BY THE ASSESSING OFFICER OR BY TH E CIT(A). THE CIT(A), WITHOUT DISCUSSING ANYTHING, SIMPLY PLACED HIS RELIANCE ON THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN Z YLOG SYSTEMS LTD (SUPRA). THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE ASSESSING OFFICER NEEDS TO CONSIDER THE FACTS OF TH E CASE AND FIND OUT WHETHER THE COMMISSION PAID BY THE ASSESSEE FOR ID ENTIFYING THE SOURCE OF HIGH QUALITY SCRAP WHICH WAS USED AS RAW MATERIAL AMOUNTS TO PROVIDING TECHNICAL SERVICE TO THE ASSESSEE OR NOT. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASS ESSING OFFICER SHALL ITA NO.157 & 158/14 2316/13 :- 8 -: RECONSIDER THE SAME IN THE LIGHT OF THE MATERIAL ON RECORD AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW A FTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 13. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ALLOCATI ON OF COMMON EXPENSES BETWEEN 10B UNIT AND NON-10B UNIT. 14. SHRI PATHLAVTH PEERYA, LD. DR SUBMITTED THAT COMMO N EXPENDITURE TO THE EXTENT OF ` 23 LAKHS WAS NOT ALLOCATED AMONG THE 10B UNIT AND NON 10B UNIT. THE ASSESSING OFFICER A LLOCATED A SUM OF ` 23 LAKHS AS ADDITIONAL ALLOCATION TOWARDS COMMON EX PENDITURE. ACCORDING TO THE LD. DR, ALLOCATION OF COMMON EXPEN DITURE BETWEEN THE NON 10B UNIT AND 10B UNIT WILL ALTER THE PROFIT OF THE NON 10B UNIT. THEREFORE, THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER TO THE EXTENT OF ` 23 LAKHS. REFERRING TO THE ORDER OF THE CIT(A), THE LD. DR POINTED OUT THAT BA SED ON THE STATEMENT FILED BY THE ASSESSEE FOR EARLIER ASSESS MENT YEAR, THE CIT(A) FOUND THAT THE DISALLOWANCE OF ` 23 LAKHS WAS REDUCED TWICE FROM THE PROFIT OF 10B UNIT. ACCORDING TO THE LD. DR, THE COMMON EXPENDITURE RELATING TO 10B UNIT WAS ADDED ONLY ONC E IN THE COMPUTATION AND THEREFORE, THE OBSERVATION OF THE C IT(A) THAT IT WAS REDUCED TWICE IS NOT JUSTIFIED. ITA NO.157 & 158/14 2316/13 :- 9 -: 15. ON THE CONTRARY, SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMMON EXPENDITURE TO T HE EXTENT OF ` 1,07,83,602/- RELATING TO 10B UNIT WAS ALLOCATED TO 10B UNIT IN THE MEMO OF ADJUSTMENT OF TOTAL INCOME, THEREFORE, THE PROFIT OF THE 10B UNIT WAS REDUCED BY THE SAID SUM. THE ASSESSEE HA S FURNISHED A STATEMENT OF COMPUTATION BEFORE THE ASSESSING OFFIC ER. THE ASSESSEE EXPLAINED THAT A SUM OF ` 21,78,432/- WAS ALLOTTED TO 10B UNIT IN ADDITION TO ` 1,07,83,602/- ALLOCATED EARLIER. THEREFORE, THE C IT(A) FOUND THAT A ROUND SUM AMOUNT OF ` 23 LAKHS WAS CONSIDERED TWICE. IN OTHER WORDS, ACCORDING TO THE LD. COUNSEL FOR TH E ASSESSEE, A SUM OF ` 23 LAKHS WAS REDUCED ONCE FROM THE PROFIT OF 10B U NIT AND THE SAME WAS AGAIN REDUCED WHILE ARRIVING AT THE TOTAL INCOME. THEREFORE, THE CIT(A) FOUND THAT A SUM OF ` 23 LAKHS WAS TAXED TWICE. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. TH E ASSESSING OFFICER FOUND THAT THE ASSESSEE ADMITTED BEFORE HIM THAT T HE EXPENSES SPECIFICALLY RELATED TO 10B UNIT HAVE ALREADY BEEN DEBITED IN THE BOOKS OF ACCOUNT MAINTAINED FOR 10B UNIT. AFTER CHARGING OF DIRECT EXPENSES, THE COMMON EXPENSES WERE ALLOCATED BETWEEN 10B AND NON 10B UNIT ON TURNOVER BASIS. FURTHER MORE, A SUM OF ` 23 LAKHS WAS ALLOCATED TO 10B UNIT AS PER THE ALLOCATION OF COMMON EXPENSES F URNISHED EARLIER. IN VIEW OF THE ADMISSION MADE BY THE ASSESSEE BEFO RE THE ASSESSING ITA NO.157 & 158/14 2316/13 :- 10 -: OFFICER, THE ADDITIONAL ALLOCATION OF 23 LAKHS TO 1 0B UNIT WAS MADE BY THE ASSESSING OFFICER. WHEN THE ASSESSEE ITSELF A LLOCATED A FURTHER SUM OF ` 23 LAKHS IN ADDITION TO THE ALLOCATION OR ` 1,07,83,602/-, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS IS NOT TAXED TWICE AS OBSERVED BY THE CIT(A). THE ASSESSEE ITSELF ALLOC ATED THE FUNDS IN ADDITION TO ` 1,07,83,602/- ALLOCATED EARLIER. THEREFORE, THIS SUM OF ` 23 LAKHS IS IN ADDITION TO ` 1,07,83,602/-. THE CIT(A) IS NOT JUSTIFIED IN SAYING THAT THIS AMOUNT OF ` 23 LAKHS WAS TAXED TWICE. THEREFORE, WE ARE UNABLE TO UPHOLD THE ORDER OF THE CIT(A). ACCO RDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND THAT OF THE ASSESSIN G OFFICER IS RESTORED. 17. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISAL LOWANCE MADE BY THE ASSESSING OFFICER U/S 40(A)(I). 18. SHRI PATHLAVATH PEERYA, LD. DR SUBMITTED THAT THE A SSESSING OFFICER DISALLOWED A SUM OF ` 7,72,65,070/- TOWARDS PAYMENT OF COMMISSION. THE ASSESSEE CLAIMED BEFORE THE ASSES SING OFFICER THAT THE COMMISSION WAS PAID FOR THE SERVICES RENDERED O UTSIDE INDIA AND THE RECIPIENT HAS NO PERMANENT ESTABLISHMENT IN IND IA. HOWEVER, THE ASSESSING OFFICER FOUND THAT IRRESPECTIVE OF THE PE RMANENT ESTABLISHMENT IN INDIA, THE ASSESSEE IS LIABLE TO DEDUCT TAX IN INDIA. REFERRING TO THE ORDER OF THE CIT(A), THE LD. DR PO INTED OUT THAT THE CIT(A) DELETED THE ADDITION ON THE BASIS OF THE DEC ISION OF THE ITA NO.157 & 158/14 2316/13 :- 11 -: AUTHORITY FOR ADVANCE RULINGS IN SPAHI PROJECTS PVT . LTD, 315 ITR 374(AAR). THIS DECISION OF THE AAR WAS RENDERED BY PLACING RELIANCE ON THE CIRCULAR ISSUED BY THE CBDT NOS.23 AND 786. ACCORDING TO THE LD. DR, THE CBDT, BY ITS CIRCULAR NO.7 DATED 22.10 .2009, HAS WITHDRAWN CIRCULAR NO.23 DATED 23.7.1969 AND 786 DA TED 7.2.2000, THEREFORE, THE CIT(A) IS NOT JUSTIFIED IN PLACING R ELIANCE ON THE CIRCULAR ISSUED IN THE YEAR 1969 AND 2000. 19. ON THE CONTRARY, SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PAYMENT OF COMMISSION W AS MADE TO NON- RESIDENT INDIANS FOR OBTAINING ORDERS FOR EXPORT OF GOODS. THE ENTIRE SERVICES WERE MADE OUTSIDE INDIA. THE RECIPIENT OF THE AMOUNT HAS NO PERMANENT ESTABLISHMENT IN INDIA, THEREFORE, THE RE CIPIENT HAS N LIABILITY TO PAY INCOME-TAX IN INDIA. HENCE, THE C IT(A) HAS RIGHTLY PLACED HIS RELIANCE ON THE DECISION OF THE AAR IN S PAHI PROJECTS PVT. LTD.(SUPRA). 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. EV EN THOUGH THE CIT(A) REFERRED TO THE DECISION OF THE AAR IN SPAHI PROEJCTS PVT. LTD.(SUPRA) AFTER EXTRACTING THE CBDT CIRCULAR NO.7 86 DATED 2.7.2000, HE FOUND THAT THE COMMISSION PAID BY THE ASSESSEE TO THE FOREIGN AGENT HAS TO BE ALLOWED AS EXPENDITURE. THE WITHDR AWAL OF THE ITA NO.157 & 158/14 2316/13 :- 12 -: CIRCULARS BY THE CBDT IN CIRCULAR NO.7 OF 2009 DATE D 22.10.2009 WAS NOT CONSIDERED BY ANY OF THE LOWER AUTHORITIES. T HIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE EFFECT OF THE CIRCULARS ISSUED EARLIER HAS TO BE CONSIDERED IN THE LIGHT OF THE LATEST CIRCULAR I SSUED I.E CIRCULAR NO.7 OF 2009. SINCE THE LOWER AUTHORITIES HAVE NO OCCAS ION TO CONSIDER CIRCULAR NO.7 OF 2009, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE ASSESSIN G OFFICER. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ENTIRE ISSUE OF PAYMENT OF COMMISSION IS REMITTED B ACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE MATERIAL AVAILABLE ON RE CORD AND THE CIRCULAR NO.7 OF 2009 ISSUED BY THE CBDT AND THEREAFTER DECI DE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPOR TUNITY TO THE ASSESSEE. 21. IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. 22. NOW, COMING TO THE ASSESSEES APPEALS FOR ASSESSME NT YEARS 2008-09 AND 2009-10, COMMON ISSUES ARISE FOR CONSID ERATION IN BOTH THE APPEALS. WE TAKE UP I.T.A.NO. 158/MDS/2014 FOR ASSESSMENT YEAR 2009-10. ITA NO.157 & 158/14 2316/13 :- 13 -: 23. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DISALLO WANCE OF ` 10,50,652/- U/S 14A OF THE ACT. 24. SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER BY INVOKING TH E PROVISIONS OF RULE 8D OF THE INCOME-TAX RULES, DISALLOWED THE CLAIM OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE FOR EARNING THE TAX FREE INCOME. MOREO VER, THE INVESTMENTS WERE MADE OUT OF THE NON-INTEREST BEARI NG FUNDS BEING THE CAPITAL AND INTERNAL RESERVES AND NOT OUT OF TH E BORROWED FUNDS. SINCE THE BORROWED FUNDS WERE NOT USED FOR MAKING I NVESTMENTS, ACCORDING TO THE LD. COUNSEL, THERE IS NO QUESTION OF ANY DISALLOWANCE U/S 14A OF THE ACT. 25. ON THE CONTRARY, SHRI PATHLAVATH PEERYA, LD. DR SUB MITTED THAT THE ASSESSEE INCURRED AN EXPENDITURE OF ` 2,08,08,000/- TOWARDS INTEREST ON THE BORROWED FUNDS DURING THE YEAR UNDE R CONSIDERATION. THOUGH THE ASSESSEE CLAIMS THAT THE INTEREST BEARI NG FUNDS WERE NOT USED FOR MAKING INVESTMENTS FOR EARNING DIVIDEND IN COME, THE NEXUS BETWEEN THE NON-INTEREST BEARING FUNDS AND INVESTME NTS COULD NOT BE ESTABLISHED. ACCORDING TO THE LD. DR, IN THE ABSEN CE OF ANY NEXUS BETWEEN THE NON-INTEREST BEARING FUNDS AND THE INVE STMENTS MADE BY ITA NO.157 & 158/14 2316/13 :- 14 -: THE ASSESSEE, THE ASSESSING OFFICER HAS RIGHTLY AP PLIED RULE 8D WHICH WAS CONFIRMED BY THE CIT(A). 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. EV EN THOUGH THE ASSESSEE CLAIMS THAT NON-INTEREST BEARING FUNDS BEI NG CAPITAL AND INTERNAL RESERVES WERE AVAILABLE FOR MAKING INVESTM ENTS, AS RIGHTLY SUBMITTED BY THE LD. DR, THERE IS NO NEXUS BETWEEN THE NON-INTEREST BEARING FUNDS AND THE INVESTMENTS MADE BY THE ASSE SSEE. IN THE ABSENCE OF ANY MATERIAL TO INDICATE THAT THE NON-IN TEREST BEARING FUNDS WERE USED FOR MAKING INVESTMENTS FOR EARNING DIVIDE ND INCOME AND THE ASSESSEE HAS PAID TO THE EXTENT OF ` 2,08,08,000/-, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RI GHTLY FOUND THAT RULE 8D IS MANDATORY, THEREFORE, THE DISALLOWANCE MADE B Y THE ASSESSING OFFICER IS RIGHTLY CONFIRMED. HENCE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND ACCORDINGL Y, THE SAME IS CONFIRMED. 27. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISALLO WANCE OF ADDITIONAL DEPRECIATION OF ` 77,84,427/-. 28. SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN RESPECT OF THE ASSETS ACQUIRED DU RING SECOND HALF OF THE EARLIER ASSESSMENT YEAR, THE ASSESSING OFFICER ALLOWED 10% ITA NO.157 & 158/14 2316/13 :- 15 -: DEPRECIATION. THE ASSESSEE CLAIMED THE BALANCE 10 % DURING THE YEAR UNDER CONSIDERATION. ACCORDING THE LD. COUNSEL, THE PURCHASE OF MACHINERY AND ITS USAGE FOR EARLIER ASSESSMENT YEAR IS NOT IN DISPUTE. HAVING 10% ALLOWED IN THE EARLIER ASSESSMENT YEAR, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER OUGHT TO HAVE AL LOWED THE BALANCE 10% DURING THE YEAR UNDER CONSIDERATION. THE LD. C OUNSEL FOR THE ASSESSEE PLACED HIS RELIANCE ON THE DECISION OF CO CHIN BENCH OF THIS TRIBUNAL IN APOLLO TYRES LTD. V. ACIT (2014) 64 SOT 203. 29. ON THE CONTRARY, SHRI PATHLAVATH PEERYA, LD. DR SUB MITTED THAT SEC. 32(1)(IIA) OF THE ACT PROVIDES FOR ADDITI ONAL DEPRECIATION @ 20% . IF 20% COULD NOT BE ALLOWED SINCE THE MACHIN ERY WAS PUT TO USE LESS THAN 180 DAYS, THE ASSESSEE CANNOT CARRY FORWARD THE BALANCE DEPRECIATION TO THE SUBSEQUENT ASSESSMENT Y EAR. IN THE ABSENCE OF ANY SPECIFIC PROVISION IN THE INCOME-TAX ACT, 1961, ACCORDING TO THE LD. DR, THE BALANCE 10% DEPRECIATI ON WHICH COULD NOT BE ALLOWED IN THE EARLIER ASSESSMENT YEAR CANNOT BE CARRIED FORWARD TO THE SUBSEQUENT ASSESSMENT YEAR. THEREFORE, THE CIT (A) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OF FICER. 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THIS ISSUE OF ADDITIONAL DEPRECIATION WAS CONSIDERED BY THE COCHIN BENCH OF THIS TRIBUNAL IN ITA NO.157 & 158/14 2316/13 :- 16 -: APOLLO TYRES LTD. V. ACIT (2014) 64 SOT 203. THE C OCHIN BENCH FOUND THAT THE ADDITIONAL DEPRECIATION CAN BE ALLOWED IN THE NEXT YEAR IN CASE THE SAME CANNOT BE ALLOWED IN THE EARLIER YEAR. IN FACT, THE COCHIN BENCH HAS OBSERVED AS FOLLOWS:- 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON REC ORD. SECTION 32(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 AND INSTALLED AFTER THE 31ST DAY OF MARCH, 2005, BY AN ASSESSEE ENGAGED IN THE BUSINESS 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 (II): PROVIDED THAT NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF (A) ANY MACHINERY OR PLANT WHICH, BEFORE ITS INSTALLATION BY THE ASSESSEE, WAS USED EITHER WITHIN OR OUTSIDE INDIA BY ANY OTHER PERSON; OR (B) ANY MACHINERY OR PLANT INSTALLED IN ANY OFFICE PREMISES OR ANY RESIDENTIAL ACCOMMODATION, INCLUDING ACCOMMODATION IN THE NATURE OF A GUEST-HOUSE; OR (C) ANY OFFICE APPLIANCES OR ROAD TRANSPORT VEHICLES; OR ITA NO.157 & 158/14 2316/13 :- 17 -: (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 BUSINESS 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 CLAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA), AS THE C ASE 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 PERIOD OF LESS THAN ONE HUNDRED AN D EIGHTY DAYS IN THAT PREVIOUS YEAR, THE DEDUCTION UNDER THIS SUB-SECTION IN RESPECT OF SUCH ASSET SHA LL 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) 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 O F ARTICLE OR THING, THEN, A SUM EQUAL TO 20% OF THE ACT UAL COST OF THE MACHINERY AND PLANT SHALL BE ALLOWED AS A DEDUCTION. IT IS NOT IN DISPUTE THAT THE ASSESSEE H AS ACQUIRED AND INSTALLED THE MACHINERY AFTER 31-03- 2005. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS ENGA GED IN THE MANUFACTURE OF ARTICLE OR THING. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION WH ICH IS EQUIVALENT TO 20% OF THE ACTUAL COST OF SUCH MACHINER Y. THE DISPUTE IS THE YEAR IN WHICH THE DEPRECIATION H AS TO BE ALLOWED. THE ASSESSEE HAS ALREADY CLAIMED 10% OF THE DEPRECIATION IN THE EARLIER ASSESSMENT YEAR SINCE T HE ITA NO.157 & 158/14 2316/13 :- 18 -: MACHINERY WAS USED FOR LESS THAN 180 DAYS AND CLAIMIN G THE BALANCE 10% IN THE YEAR UNDER CONSIDERATION. SEC TION 32(1)(IIA) DOES NOT SAY THAT THE YEAR IN WHICH THE ADDITIONAL DEPRECIATION HAS TO BE ALLOWED. IT SIMPL Y SAYS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPREC IATION EQUAL TO 20% OF THE COST OF THE MACHINERY PROVIDED TH E MACHINERY OR PLANT IS ACQUIRED 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 AMOUNT CALCULATED AT THE PRESCRIBED RATE. THEREFORE, IF THE MACHINERY IS PUT TO USE IN ANY PARTICULAR YEAR, THE ASSESSEE IS ENTITLED FO R 50% OF THE PRESCRIBED RATE OF ADDITIONAL DEPRECIATION. THE INCOME-TAX ACT IS SILENT ABOUT THE ALLOWANCE OF THE BALANCE 10% ADDITIONAL DEPRECIATION IN THE SUBSEQUEN T YEAR. TAKING ADVANTAGE OF THIS POSITION, THE ASSESS EE NOW CLAIMS THAT THE YEAR IN WHICH THE MACHINERY WAS PUT TO USE THE ASSESSEE IS ENTITLED FOR 50% ADDITIONAL DEPRECIATION SINCE THE MACHINERY WAS PUT TO USE FOR LESS THAN 180 DAYS AND THE BALANCE 50% SHALL BE ALLOWED IN T HE NEXT YEAR SINCE THE ELIGIBILITY OF THE ASSESSEE FOR CLAIMING 20% OF THE ADDITIONAL DEPRECIATION CANNOT BE DENIED B Y INVOKING SECOND PROVISO TO SECTION 32(1)(II) OF THE A CT. 12. THIS ISSUE WAS CONSIDERED BY THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF COSMO FILMS LTD (SUPRA ). THE REVENUE HAS TAKEN A SIMILAR GROUND AS TAKEN BEFORE THIS TRIBUNAL THAT THE ASSESSEE CANNOT CARRY FORWARD THE ADDITIONAL DEPRECIATION TO BE ALLOWED IN THE SUBSEQ UENT ASSESSMENT YEAR. THE DELHI BENCH OF THIS TRIBUNAL AF TER 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 BALAN CE 50%, THE ASSESSEE IS ENTITLED FOR THE BALANCE ADDITIONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR. IN FACT, THE DELHI BENCH OF THIS TRIBUNAL HAS OBSERVED AS FOL LOWS AT PAGES 641 AND 642 OF THE ITD: ITA NO.157 & 158/14 2316/13 :- 19 -: ' THUS, THE INTENTION WAS NOT TO DENY THE BENEFIT T O THE ASSESSEES WHO HAVE ACQUIRED OR INSTALLED NEW MACHINERY OR PLANT. THE SECOND PROVISO TO SECTION 32(1)(II) RESTRICTS 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 ON THE BASIS OF PERIOD OF USE. THERE I NO RESTRICTION THAT BALANCE OF ONE TIME INCENTIVE IN THE FORM OF ADDITIONAL SUM OF DEPRECIATION SHALL NOT BE AVAILABLE IN THE SUBSEQUE NT YEAR. SECTION 32(2) PROVIDES FOR A CARRY FORWARD SET UP OF UNABSORBED DEPRECIATION. THIS ADDITIONAL BENEFIT IN THE FORM OF ADDITIONAL ALLOWANCE U/S 32(1)(IIA) IS ONE TIME BENEFIT TO ENCOURAGE THE INDUSTRIALIZATION AND IN VIEW 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 PROVISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. THIS ADDITIONAL BENEFIT IS TO GIVE IMPETUS TO INDUSTRIALIZATION AND THE BASIC INTENTION AND PURPO SE OF THESE PROVISIONS CAN BE REASONABLY AND LIBERALLY HELD THAT THE ASSESSEE DESERVES TO GET THE BENEFIT IN FULL WHEN THERE IS NO RESTRICTION 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 USE D I 'SHALL BE ALLOWED'. THUS, THE ASSESSEE HAD EARNED THE BENEFIT AS SOON AS HE HAD PURCHASED THE NEW MACHINERY AND PLANT 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 DEPRECIATION ALLOWABLE U/S 32(1)(IIA) IN AN EXTRA ITA NO.157 & 158/14 2316/13 :- 20 -: INCENTIVE WHICH HAS BEEN EARNED AND CALCULATED IN THE YEAR OF ACQUISITION BUT RESTRICTED FOR THAT YEA R TO 50% ON ACCOUNT OF USAGE. THE SO EARNED INCENTIVE MUST BE MADE AVAILABLE IN THE SUBSEQUENT YEAR. THE OVERALL DEDUCTION OF DEPRECIATION U/S 32 SHALL DEFINITELY NOT EXCEED THE TOTAL COST OF MACHINERY AND PLANT . IN VIEW OF THIS MATTER, WE SET ASIDE TH E ORDERS OF THE AUTHORITIES BELOW AND DIRECT TO EXTEND THE BENEFIT. 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 DECIDE THE ALTERNA TE 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 DIRECTIONS GIVEN BY THE LEARNED CIT(A) ARE NOT PROPER. THE ELIGIBILITY FOR DEDUCTION OF ADDITIONAL DEPRECIATION STANDS ADMITTED, 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 CURRENT YEAR, I.E. ASST. YR. 2006-07. THE LEARNED CIT(A) HAS MERELY DIRECTED THE VERIFICATION OF THE CONTENTIONS OF THE ASSESSEE AND TO ALLOW THE BALANC E 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 THIS TRIBUNAL IN MITC ROLLING MILLS (P.) LTD. (SUPRA). I N VIEW OF THE ABOVE DECISIONS OF THE CO-ORDINATE BENCHES OF T HIS TRIBUNAL ON IDENTICAL SET OF FACTS THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE BALANCE 50% OF THE DEPRECIATION HAS TO BE ALLOWED IN THE SUBSEQUENT YE AR, THEREFORE, THE ORDERS OF THE LOWER AUTHORITIES ON T HIS ISSUE ARE SET SIDE AND THE ASSESSING OFFICER IS DIR ECTED TO ITA NO.157 & 158/14 2316/13 :- 21 -: ALLOW THE CLAIM OF BALANCE 50% ADDITIONAL DEPRECIATIO N IN THE YEAR UNDER CONSIDERATION. 31. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE C ONSIDERED OPINION THAT THE DEPRECIATION WHICH COULD NOT BE AL LOWED IN THE EARLIER ASSESSMENT YEAR TO THE EXTENT OF 10% HAS TO BE ALLO WED IN THE SUBSEQUENT ASSESSMENT YEAR. ACCORDINGLY, THE OR DERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW BALANCE 10% ADDITIONAL DEPRECIATION DURING THE YEAR UNDER CONSIDERATION. 32. IN THE RESULT, BOTH THE APPEALS OF THE ASSESS EE ARE PARTLY ALLOWED. 33. TO SUMMARIZE, THE REVENUES APPEAL IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES WHEREAS THE ASSESSEES APPEAL S ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH MARCH, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER / CHENNAI ! / DATED: 4 TH MARCH, 2016 RD !' # $% &% / COPY TO: 1 . '( / APPELLANT 4. ) / CIT 2. #*'( / RESPONDENT 5. %+, # - / DR 3. ) () / CIT(A) 6. ,/ 0 / GF