ACG PAMPAC MACHINES P.LTD, MUMBAI V. PR CIT CEN 4, MUMBAI

ITA 3565/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9807 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Assessee Lawyers: MANISH V SHAH
• Keywords: Depreciation; Additional depreciation; Assessment record
• Section: 143(3); 32; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 3565 / MUM/20 1 7 ( ASSESSMENT YEAR : 2012 - 13 ) M/S. ACG PAMPAC MACHINES PVT. LTD., 1001, DALALMAL HOUSE, 10 TH FLOOR, NARIMAN POINT, MUM BAI 400 021 VS. PR CIT CEN 4, R.NO.663, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020 PAN/GIR NO. AAACP4134F APPELLANT ) .. RESPONDENT ) ITA NO. 3566/ MUM/20 17 ( ASSESSMENT YEAR : 2012 - 13 ) M/S. ACG PHARMAPACK PVT. LTD., 1001, DALALMAL H OUSE, 10 TH FLOOR, NARIMAN POINT, MUMBAI 400 021 VS. PR CIT CEN 4, R.NO.663, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020 PAN/GIR NO. AAACP4134F APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI MANISH V.SHAH REVENUE BY SHRI R.P. MEE NA DATE OF HEARING 11/07 /201 7 DATE OF PRONOUNCEME NT 23 / 08 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASS ESSEE AGAINST THE ORDER OF CIT (CENTRAL ) - 4, MUMBAI DATED 15/03/2017 FOR THE A.Y.2012 - 13 IN THE MATTER OF ORDER PASSED U/S.263 OF THE IT ACT. 2. THE FOLLOWING COMMON GROUNDS HAV E BEEN TAKEN BY BOTH THE ASSESSEES. GROU N D I - INVOKING PROVISIONS OF SECTION 263 OF THE INCOME - TAX ACT, 1961 ('THE ACT'): ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX - 4, MUMBAI ('THE PR. CI T') ERRED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT AND THEREBY REVISING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX - 7(3), MUMBAI ('THE A O )') U/S. 143(3) OF THE ACT DATED FEBRUARY 26, 2016 ('THE ORDER') ON THE ALLEGED GROUND THAT THE ORDER PASSED BY THE A O WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2. THE APPELLANT PRAYS THAT IT BE HELD THAT THE ASSESSMENT ORDER PASSED BY THE A O IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGL Y THE ACTION OF THE PR. CI T IN INVOKING PROVISIONS OF SECTION 263 OF THE ACT IS AB - INITIO AND / OR OTHERWISE VOID AND /BAD - IN - LAW. WITHOUT PREJUDICE TO GROUND I: GROUND 11: DISALLOWANCE OF ADDITIONAL DEPRECIATION AMOUNTING TO RS. 12,29,935/ - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PR. C IT ERRED IN ERRED SETTING ASIDE THE ORDER PASSED BY THE AO U/S. 143(3) OF THE ACT ON THE ALLEGATION THAT ADEQUATE INQUIRY AND INVESTIGATION WAS NOT CONDUCTED WHILE ALLOWING THE CLAIM OF THE APPELLAN T IN RESPECT OF ADDITIONAL DEPRECIATION U / S 32 OF THE ACT, AMOUNTING TO RS. 12,29,935/ - . 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD THAT BENEFIT OF ADDITIONAL DEPRECIATION U/S 32(1)(IIA) HAS TO BE CONSTRUED LIBERALLY THERE IS NO RESTRICTION ON ASS ESSEE TO CARRY FORWARD ADDITIONAL DEPRECIATION AND, THUS, WHERE ONLY 50 PER CENT OF ADDITIONAL DEPRECIATION 'IS ALLOWED IN YEAR OF PURCHASE OF MACHINERY AS IT WAS PUT TO USE FOR LASS THAN 180 DAYS DURING SAID YEAR, BALANCE 50 PER CENT OF ADDITIONAL DEPRECI ATION CAN BE CLAIMED IN SUBSEQUENT ASSESSMENT YEAR 3. TH E APPELLANT THEREFOR E PRAY THAT THE DIRECTION OF THE PR. CIT IN THIS REGARDS SHOULD BE Q UASHED. GROUND III : THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND AND! OR ALTER ALL OR ANY OF THE ABOVE GRO UNDS. ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 3 3. GROUNDS TAKEN IN BOTH THE APPEALS ARE COMMON, THEREFORE, BOTH THE APPEALS ARE HEARD TOGETHER AND ARE NOW DECIDED BY THIS CONSOLIDATED ORDER. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. IN THE ORDER PASSED U/S.263, THE CIT OBSERVED AS UNDER: - 2. ON GOING THROUGH THE ASSESSMENT RECORD, IT WAS NOTICED THAT THE ASSESSING OFFICER HAS PASSED THE ORDER WITHOUT MAKING REQUIRED ENQUIRIES/INVESTIGATIONS WHICH RESULTED INTO THE ORDER BEING ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE IN TERMS OF EXPLANATION 2 TO SECTION. 263 OF THE INCOME TAX ACT. THE PRO CEEDINGS U/S. 263 WERE THEREFORE INITIATED, BY WAY OF ISSUE OF SHOW CAUSE NOTICE DATED 11.02.2016. THE EXTRACT OF RELEVANT PARAS OF THE SAID NOTICE ARE REPRODUCED [AFTER RE - PARAGRAPHING] AS UNDER : - 1.1. ON EXAMINATION OF THE RECORDS FOR A.Y. 2012 - 13, IT IS NOTICED THAT THE ASSESSMENT PROCEEDINGS WERE COMPLETED U/S. 143(3) OF THE I.T. ACT, VIDE ORDER DATED 26.02.2015, DETERMINING TOTAL INCOME OF RS 16,96,69,733/ - 1.2. THE STATEMENT SHOWING THE WORKING OF DEPRECIATION AS PER INCOME TAX ACT [AS PER ANNEXURE TO CLAUSE 14 TO THE FORM 3CD ENCLOSED WITH THE RETURN] REVEALS THAT THE ASSESSEE HAS CLAIMED BALANCE 50% OF THE ADDITIONAL DEPRECIATION UNDER SECTION 32(1 )(IIA) AMOUNTING TO RS. 12,29,935 / - ON THE ADDITIONS MADE IN ASSETS DURING THE SECOND HALF OF THE FINANCIAL YEAR 2010 - 11 RELEVANT TO A.Y. 2011 - 12. 1.3]. THE QUANTUM OF PERMISSIBLE ALLOWANCE OF DEPRECIATION U NDER CLAUSE (I), (II) AND (IIA) TO SECTION 32(1) IS LIMITED TO 50% IF THE ASSET HAS BEEN PUT TO USE FOR THE PURPOSES OF BUSINESS FOR A PERIOD LESS THAN ONE HUNDRED AND EIGHTY DAYS IN THE PREVIOUS YEAR. FURTHER AS PER THE THIRD PROVISO TO CLAUSE (II) OF THE SUB SECTION (1) OF SECTION 32, THE BALANCE 50% OF THE A DDITION AL DEPRECIATION ADMISSIBLE UNDER CLAUSE (IIA) IS ALLOWABLE IN THE SUCCEEDING PREVIOUS YEAR, BUT THEN THIS PROVISO IS INSERTED BY THE FINANCE ACT, 2015 AND IS EFFECTIVE PROSPECTIVELY FROM 01.04.2016 ONLY. THEREFORE, THE BALANCE 50% OF THE DEPRECIATION RELAT ING TO ASSETS ADDED IN SECOND HALF OF THE FINANCIAL YEAR 2010 - 11, IS NOT ALLOWABLE IN A.Y. 2012 - 13. 1.4]. A PERUSAL OF THE RECORDS AND THE ASSESSMENT ORDER SHOWS THAT THE AO HAS NOT MADE THE DISALLOWANCE OF DEPRECIATION TO THE EXTENT OF RS.12,29,935/ - BEI NG THE ADDITIONAL DEPRECIATION CLAIMED IN RESPECT OF ADDITIONS IN ASSETS MADE DURING THE ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 4 S ECOND HALF OF THE FINANCIAL YEAR 2010 - 11 RELEVANT TO A.Y. 2011 - 12. 1.5]. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THERE IS A FAILURE ON THE PART OF THE ASSESSING OFFICE R TO EXAMINE THE ISSUE OF CLAIM OF ADDITIONAL DEPRECIATION IN TERMS OF PROVISIONS OF SECTION 32(1), WHICH HAS RENDERED THE IMPUGNED ASSESSMENT ORDER PASSED U/S.143(3) OF THE I.T. ACT ERRONEOUS, IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE, IN TERMS OF EXPLANATION 2 TO SECTION 263 OF THE IT ACT. 5. AFTER REFERRING EXPLANATION 2 TO SECTION 263, CIT CONCLUDED AS UNDER: - 5. I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSEE [AS REPRODUCED HEREIN ABOVE PARA 3] IN RESPECT OF THE ISSUE UNDER REF ERENCE. THE SHOW CAUSE NOTICE [WHICH IS REPRODUCED IN PARA 2 HEREIN ABOVE] IS GIVEN TO REVISE THE ASSESSMENT ORDER, AS WHILE MAKING ASSESSMENT, THE AO HAS NOT EXAMINED THE ISSUE OF CLAIM OF ADDITIONAL DEPRECIATION IN RESPECT OF ADDITION IN ASSETS MADE DURI NG THE SECOND HALF OF THE FINANCIAL YEAR 2010 - 11 RELEVANT TO A.Y. 2011 - 12, WITH REFERENCE TO THE THIRD PROVISO TO CLAUSE (II) OF THE SUB - SECTION (1) OF SECTION 32, INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01/04/2016. THE CLAUSE (A) TO THE SAID EXPLANATION MAKES IT VERY CL EAR THAT THE ORDER PASSED BY THE AO WITHOUT MAKING ENQUIRIES/ VERIFICATION WHICH SHOULD HAVE BEEN MADE, WOULD BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. AS SUCH, THE DECISIONS RELIED ON BY THE ASSESSEE ARE OF NO RELEVANCE NOW, IN VIEW OF TH E SAID EXPLANATION 2 TO SECTION 263 OF THE ACT. EVEN OTHERWISE, IT IS NOTEWORTHY THAT THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED V. CIT (2000) 109 TAXMAN 66 (SC) HAD HELD THAT IF THE AO HAS ACCEPTED THE ENTRY IN THE STATEMENT OF ACCOUNT FILED BY THE TAXPAYER WITHOUT MAKING ENQUIRY, THE SAID ORDER OF THE AO SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 6. AFTER HAVING CONSIDERED THE FACTS OF THE CASE AND THE ASSESSEE'S SUBMISSIONS IN REFERENCE TO SHOW CAUSE NOTICE AS WELL AS THE EXPLANATION 2 TO SECTION 263 INSERTED BY THE FINANCE ACT 2015, WHICH, IS DECLARATORY AND CLARIFICATORY IN NATURE AND PROVIDE CLARITY ON THE ISSUE, THE ASS ESSMENT ORDER UNDER REFERENCE [AY 2012 - 13] IS SET ASIDE ON THIS ISSUE TO THE FILE OF THE AO TO BE MADE DE - NOVO AFTER MAKING NECESSARY ENQUIRIES AND INVESTIGATION AND AFTER ASCERTAINING ALL THE FACTS ON THE ISSUE OF ALLOWANCE OF ADDITIONAL DEPRECIATION. NE EDLESS TO ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 5 MENTION DUE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE WHILE COMPLETING THE ASSESSMENT AFRESH . 6. AGAINST THE ABOVE ORDER OF CIT PASSED U/S.263, THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. IT WAS VEHEMENTLY ARGUED BY LEARNED AR THAT MERELY BECAUSE AN ISSUE HAS NOT BEEN DISCUSSED IN DETAIL IN THE ASSESSMENT ORDER, DOES NOT INDICATE THAT THERE IS LACK OF INQUIRY / PREJUDICE CAUSED TO THE REVENUE. FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - 1 CIT V. GABRIEL INDIA LTD. (203 ITR 108) (BORN. HC) 2 CIT V. HRI T.P. TEXTILES (P.) LTD. (394 ITR 48) (MAD. HC) 3 CIT V. KRISHNA CAPBOX (P.) LTD. (372 ITR 310) (ALL. HC) 4 SMALL WONDER INDUSTRIES V. CIT (ITA O. 2464/MUM/2013) (MUM. TRIB.) 8. ON MERIT OF THE ADDITION / DISALLOWANCE PROPOSED, CONTENTION OF LEARNED AR WAS THAT THERE IS NO RESTRICTION ON ASSESSEE TO CARR Y FORWARD ADDITIONAL DEPRECIATION U/S 32(1)(IIA) AND CLAIM THE SAME IN THE SUBSEQUENT YEAR W HERE ONLY 50 PERCENT OF ADDITIONAL DEPRECIATION IS CLAIMED IN THE YEAR OF P URCHASE ON THE PLEA THAT IT WAS PUT TO USE FOR LESS THAN 180 DAYS DURING THE SAID YEAR . IN SUPPORT OF THE PROPOSITION, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - I CIT V. HRI T. P. TEXTILE (P.) LTD. (394 ITR 48 ) (MAD. HC) 2 CIT . RITTAL I NDIA (P.) LTD. (380 ITR 423) (KAR. HC) 3 DCIT V. M/S. GODREJ INDU S TRIE S LTD. (ITA O. 6438/MURNL2013) (MUM. TRIB.) 4 M/S WELL KNOWN POLY S TERS LTD. . JCIT (ITA 0.70 15/MUM/20 15) (MUM. TRIB.) 5 M/S MITC ROLLING MILL P. LTD. V. ACLT (ITA O. 2789/MUM/2012) (MUM. TRIB) ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 6 6 TV MOTOR COMPANY LTD. . ACIT (77 TAXMANN.CO M 105) (CHEN. TRIB.) 7 INDIA PIS TONS LTD. . ACFT (75 TAXMANN.COM 99) (CHEN. TRIB.) M/S AUTOMOTIVE COACHES & COMPONENTS LTD. V. DCIT (ITA O. I 789/MDS/20 14) 8 (CHEN. TRIB.) 9 UNIV ER S AL CAB LES LTD. V. DCIT (68 OT 307) (KOL . TRIB.) 10 BIRLA CORPORATION LTD. V. DCIT (69 OT 21 ) (K OL . TRIB.) 11 APOLLO TYRES LTD. V. ACIT (64 S OT 2 03) (COCHIN TRIB.) 12 ITO V. MI ASWANI INDUSTRIE S (IT A NO.140/A HD/2013)( A HD. TRI B .) 13 ACIT V. S IL INV ESTMENT LTD. (54 S OT 5 4) (DELHI. TRIB.) 14 DCI T V . COSMO FILMS LTD. (139 IT D 6 28 TRIB) 9. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDER OF THE CIT AND CONTENDED THAT THE AMENDMENT TO SECTION 263 OF THE ACT, VIDE FINANCE ACT 2015 W.E.F. 1ST JUNE 20~Y INSERTION OF EXPLANATION 2 TO SECTION 263 OF THE ACT IS DECLARATORY & CLARIFICATORY IN NATURE AND INSERTED TO PROVIDE CLARITY ON THE ISSUE AS TO WHICH ORDERS PASSED BY THE AO SHALL CONSTITUTE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. BY THE SA ID EXPLANATION, IT IS, INTER - ALIA, PROVIDED THAT IF THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATIONS BY AO WHICH, SHOULD HAVE BEEN MADE OR THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; T HE ORDER SHALL BE DEEMED TO B E ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF REVENUE. 10. WITH REGARD TO THE MERIT OF THE DISALLOWANCE CONTENTION OF LEARNED DR WAS THAT ADDITIONAL DEPRECIATION U/S.32(1)(IIA) IS NOT ALLOWED TO BE CARRIED FORWARD AND CIT(A) HAS CORRECTLY DIRECTED THE AO TO RE - COMPUTE THE SAME WITH REFERENCE TO THE THIRD PROVISO TO CLAUSE(II) OF THE SUB SECTION (1) OF SECTION 32, INSERTED BY THE FINANCE ACT 2015 W.E.F. 01/04/2016. ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 7 11. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORI TIES BELOW. WE HAD ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LEARNED AR AND DR DURING THE COURSE OF HEARING BEFORE US. 12. FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN BUSINESS OF MANUFACTURING OF ENGINEERING GOODS. DURING THE A.Y.2011 - 12 , IN RESPECT OF NEW PLANT AND MACHINERY, ASSESSEE CLAIMED ADDITIONAL DEPRECIATION U/S.32(1)(IIA). SINCE MACHINERY WAS INSTALLED AND WORKED FOR LESS THAN SIX MONTHS, THE ASSESSEE HAS CLAIMED 50% OF ADDITIONAL DEPRECIATION IN A.Y.2011 - 12 AND CLAIM CARRY FO RWARD OF THE BALANCE 50% TO BE SET OFF IN THE NEXT YEAR I.E., A.Y.2012 - 13 UNDER CONSIDERATION . THE CIT WAS OF THE VIEW THAT PROVISO WAS INSERTED BY THE FINANCE ACT 2015, ACCORDINGLY CARRY FORWARD AND SET - OFF OF DEPRECIATION WAS PERMISSIBLE ONLY W.E.F. A.Y. 2016 - 17. ACCORDINGLY, HE DIRECTED THE AO TO EXAMINE THE ISSUE OF CLAIM OF ADDITIONAL DEPRECIATION DURING THE SECOND HALF OF THE FINANCIAL YEAR 2010 - 11 RELEVANT TO THE A.Y. 2011 - 12 WITH REFERENCE TO THE THIRD PROVISO TO CLAUSE (II) OF SUB SECTION (1) OF SE CTION 32 INSERTED BY THE FINANCE ACT 2015. 13. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED BY LEARNED AR. THE ELIGIBILITY TO CARRY FORWARD AND SET OFF 50% OF THE ADDITIONAL DEPRECIATION TO THE SUBSEQUENT YEAR ON THE PLEA OF MACHINERY HAVING BEEN WORKED FOR LESS THAN SIX MONTHS HAS BEEN ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 8 DECIDED BY MADRAS HIGH COURT IN CASE OF T.P.TEXTILES PVT. LTD., 394 ITR 482 FOR THE A.Y. 2011 - 12, WHEREIN COURT HELD AS UNDER: - THE PLAIN LANGUAGE OF SECTION 32(1)(IIA) READ ALONG WITH THE RELEVANT PROVISO WOULD HAVE US COME TO THE CONCLUSION THAT, THERE IS NO LIMITATION IN THE ASSESSEE CLAIMING THE BALANCE 10% OF ADDITI ONAL DEPRECIATION IN THE SUCCEEDING ASSESSMENT YEAR. AS A MATTER OF FACT, WITH EFFECT FROM 01.04.2016, THE AMBIGUITY, IF ANY, IN THIS REGARD, IN THE MIND OF THE ASSESSING OFFICER, STANDS REMOVED BY VIRTUE OF THE LEGISLATURE, INCORPORATING IN THE STATUTE, T HE NECESSARY CLARIFICATORY AMENDMENT. A PERUSAL OF THE MEMORANDUM EXPLAINING PROVISIONS OF FINANCIAL BILL, 2015 WOULD SHOW THAT THE LEGISLATURE RECOGNISED THE FACT THAT THE MATTER 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 180 DAYS, AS AGAINST THAT, WHICH WAS USED FOR 180 DAYS OR MORE. THE AMENDMENT IS CLARIFICATORY IN NATURE AND NOT PROSPECTIVE, AS IS SOUGHT TO BE CON TENDED 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. THE MEMORANDUM, WHICH IS SOUGHT TO BE RELIED UPON BY THE REVENUE, ONLY CLARIFIES AS TO HOW THE UNAMENDED PROVISION HAD TO BE READ ALL ALONG. IN ANY EVENT, IN SO FAR AS THE COURT IS CONCERNED, IT HAS TO GO BY THE PLAIN LANGUAGE OF THE UNAMENDED PROVISION, AND THEN, COME TO A CONCLUSION IN THE MATTER. AS ALLUDED TO ABOVE, OUR V IEW, IS THAT, UPON A PLAIN READING OF THE UNAMENDED PROVISION, IT COULD NOT BE SAID THAT THE ASSESSEE COULD NOT CLAIM BALANCE DEPRECIATION IN THE A.Y., WHICH FOLLOWS THE A.Y., IN WHICH, THE MACHINERY HAD BEEN BOUGHT AND USED, ALBEIT, FOR LESS THAN 180 DAYS . THUS, HAVING REGARD TO THE FOREGOING DISCUSSION, WE ARE OF THE VIEW THAT NO INTERFERENCE IS CALLED FOR WITH THE IMPUGNED JUDGMENT OF THE TRIBUNAL. THE APPEAL IS, ACCORDINGLY, DISMISSED. 13. FURTHERMORE, KARNATAKA HIGH COURT IN THE CASE OF RITTAL IN DIA (P) LTD., 380 ITR 423 HELD AS UNDER: - CLAUSE (IIA) OF SECTION 32(1 ), A S IT NOW STANDS, WAS SUBSTITUTED BY THE FINANCE ACT. 2005, APPLICABLE WITH EFFECT FROM 1 - 4 - 2006 . PRIOR TO THAT, A PROVISO TO TH E SAID C LAUSE WAS THERE, P ROVIDED FOR THE BENEFIT TO B E GI VEN ONL Y TO A NEW INDUSTRIAL UNDER TA K ING, OR ON LY WHERE A NEW INDUSTRIAL UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE DURI N G ANY YEAR PREVIOUS TO THE RELEVANT ASSESSMENT YEAR. THE AFORESAID TWO CONDITIONS, I.E ., (TH E UNDERTAKING ACQUIRING NEW PLA NT A N D MACHINERY SHOULD BE A NEW INDUS TRIAL UNDERTAKING OR THAT IT SHOULD BE CLAIMED IN O NE YEAR, HAVE BEEN DONE BY SUBSTITUTING CLAUSE (IIA) WITH EFFECT FROM 1 - 4 - ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 9 2006. THE GRANT OF ADDITIONAL DEPRECI ATION UNDER THE AFORESAID PROVISION, IS FOR THE BENEFIT OF TH E ASSESSEE AND WITH THE PURPOSE O F ENCOURAGING INDUSTRIALIZATION, BY EITHER SETTING UP A NEW INDUSTRIAL UNIT OR BY EXPANDING THE EXISTING UNIT BY PURCHASE OF HEW PLANT AN D MACHINERY, AND PUTTING IT TO USE FOR THE PURPOSE OF BUSINESS. THE PROVISO TO C LAUSE (II) OF THE SAID SECTION MAK ES IT CLEAR THAT ON L Y 50 PER CENT OF THE 20 PER CENT WOULD BE ALLOWABLE, IF THE NEW PLANT AND MACHINERY SO ACQUIRED IS PUT TO USE FOR LESS THAN 180 DAYS IN A FINAN CIAL YEAR. HOWEVER, IT NOWHERE RESTRICTS THAT THE BALANCE 10 PERC ENT WOULD NOT BE ALLOWED TO BE CLAIMED BY THE ASSESSEE IN THE N EXT ASSESSMENT YEAR. THE LANGUAGE USED IN CLAUSE (IIA) OF THE SAID SECTION CLEARLY PROVIDES THAT 'A FURT HER SUM EQUAL TO 20 PER CENT OF THE ACTUAL COST OF SUCH MACHINERY OR PLA N T SHALL BE ALLO WED AS DEDUCTION UNDER CLAUSE (II)'. THE WORD 'SHALL USED IN THE SAID CLAUSE IS VERY SIGNIFICANT. THE BE N EFI T WHICH IS TO BE GRANTED IS 20 PER CENT ADDITIONAL DEPRECIATION. BY VIRTUE OF THE PROVISO REFERRED TO ABOVE, ONLY 10 PER CENT CAN BE CLAIMED IN ONE YEAR, IF PLANT AND MACHINERY IS PUT TO USE FOR LESS THAN 180 DAYS IN THE SAID FINANCIAL YEAR. THIS WOULD NECESSARILY MEAN THAT T H E BALA N CE 10 PER CENT ADDITIONAL DEDUCTION CAN BE AVAILED IN THE SUBSEQUENT ASSESSMENT YEAR, OTHERWISE THE. VERY PURPOSE OF IN SERTION OF CLAUSE ( IIA) WOULD BE DEFEATED BECAUSE IT PROVIDES FOR 20 PER CENT DEDUCTION WHICH SHAL L BE A LLOWED. IT HAS BEEN CONSISTENTLY H ELD BY THIS COURT, AS WELL AS TH E APEX COUNT, THAT BENEFICIAL LEGISLATION, AS IN THE INSTANT CASE, SHOULD BE GIVEN LIB ERAL INTERPRETATION SET AS TO BENEFIT THE ASSES SEE. IN THIS CASE, THE INTENTION OF THE LEGISLATION IS ABSO LU TELY CLEAR, THAT THE ASSESSEE SHALL BE ALLOWED CERTAIN ADDITIONAL BENEFIT, WHICH WAS RESTRICTED BY T H E PROVISO TO ONLY HALF OF T HE SAME BEING GRANTE D IN ONE ASSESSMENT YEAR, IF CERTAIN CONDITION WAS WOULD NOT RESTRAIN THE ASSESSEE FROM CLAIMING THE BALANCE OF BENEFIT IN THE SUBSEQUENT ASSESSMENT YEAR. THE TRIBUNAL, HAS RIGHTLY HELD, THAT ADDITIONAL DEPRECIATION ALLOWED UNDER SECTION 32(L )( IIA) IS A ON E - TIME BENEFIT TO ENCOURAGE INDUSTRIALIZATION, AND THE PROVISIONS RELATED TO IT HAVE TO BE CONSTRUED REAS ONABLY, LIBERALLY AND PURPOSIVEL Y, TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING ADDITIONAL ALLOWANCE. IN VIEW OF TH E AFORESAID, NO INTERFERENCE IS CALLED FOR WITH THE ORDER OF THE TRIBUNAL. 14. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE HIGH COURT AS WELL AS OTHER DECISION CITED BY LEARNED AR, WE DO NOT FIND ANY MERIT IN THE ACTION OF CIT FOR DECLINING THE CLAIM OF ADDITIONAL DEPRECIATI ON TO BE CARRIED FORWARD. ITA NO. 3565 & 3566/MUM/2017 M/S. ACG PAMPAC MACHINES PVT. LTD., & ACG PHARMAPACK PVT. LTD., 10 15. IN THE RESULT, APPEALS ARE ALLOWED IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 08 /2017 S D/ - ( AMARJIT SINGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEM BER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 08 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//