WELLKNOWN POLYSTERS LTD, MUMBAI V. JCIT 4(3), MUMBAI

ITA 7015/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83734 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 23-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Assessee Lawyers: ISHWER P RATHI
• Keywords: Depreciation; Additional depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'G' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO. 7015/MUM/2012 (ASSESSMENT YEAR: 2009-10) M/S. WELLKNOWN POLYSTERS LTD. VS. J C I T - 4(3) 14TH FLOOR, B WING 241/242, NIRMAL, NARIMAN POINT MUMBAI 400021 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN - AAACW1018K APPELLANT RESPONDENT APPELLANT BY: SHRI ISHWER P. RATHI RESPONDENT BY: SHRI N. PADMANABAN DATE OF HEARING: 17.09.2014 DATE OF PRONOUNCEMENT: 17.09.2014 O R D E R PER D. MANMOHAN, V.P. THIS APPEAL BY THE ASSESSEE COMPANY IS DIRECTED AGA INST THE ORDER PASSED BY THE CIT(A)-8, MUMBAI AND IT PERTAINS TO A Y 2009-10. 2. THE ONLY GROUND URGED BEFORE US READS AS UNDER: - 1. THE LEARNED CIT(A) IS ERRED IN DISALLOWING ADDI TIONAL DEPRECIATION OF RS.3,70,00,800/- AS PER SECTION 32(IIA) OF THE I NCOME TAX ACT ON ADDITION OF PLANT & MACHINERY MADE DURING 01.10. 2007 TO 31.02.2008. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEAL ARE STAT ED IN BRIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF TEXTURISED FULLY DRAWN YARN AND TWISTED YARN. DURING THE FINANCIAL Y EAR 2007-08 ASSESSEE MADE ADDITIONS TO THE PLANT AND MACHINERY. ASSESSEE IS ENTITLED TO CLAIM ADDITIONAL DEPRECIATION AT 20% UNDER SECTION 32(1)( IIA) OF THE INCOME TAX ACT. HOWEVER, THE PLANT AND MACHINERY HAVING BEEN H ELD FOR LESS THAN 180 DAYS DURING THE FINANCIAL YEAR 2007-08, 50% OF THE TOTAL ELIGIBLE LIMIT CAN BE CLAIMED AS DEDUCTION. IN OTHER WORDS, ASSESSEE CLAI MED ONLY 10% ADDITIONAL DEPRECIATION AND THE REMAINING 10% ADDITIONAL DEPRE CIATION WAS CLAIMED IN THE SUBSEQUENT YEAR, I.E. THE YEAR UNDER APPEAL. AC CORDING TO THE AO AS WELL ITA NO. 7015/MUM/2012 M/S. WELLKNOWN POLYSTERS LTD. 2 AS THE CIT(A) ADDITIONAL DEPRECIATION IS AVAILABLE ONLY IN THE YEAR IN WHICH NEW PLANT AND MACHINERY WERE PUT TO USE. EVEN IF TH E ASSESSEE IS NOT ABLE TO AVAIL 20% BENEFIT IN THE FIRST YEAR THE BALANCE CAN NOT BE ALLOWED AS DEDUCTION, IN THE OPINION OF THE TAX AUTHORITIES. T HUS THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED BEFORE US COPIES OF THE FOLLOWING ORDERS OF THE TRIBUNAL TO SUBMIT THAT THE RE IS NO EMBARGO UNDER SECTION 32(1)(IIA) IN CLAIMING BALANCE DEPRECIATION IN THE SUBSEQUENT YEAR; WHEN ASSESSEE IS NOT AVAILING 20% ADDITIONAL DEPREC IATION IN THE YEAR OF PURCHASE ASSESSEE CAN CLAIM THE BALANCE DEPRECIATIO N IN THE SUBSEQUENT YEAR: - I) ACIT VS. SIL INVESTMENT LTD. 54 SOT 54 (DEL) II) DCIT VS. COSMO FILMS LTD. 139 ITD 628 (DEL) 5. THE LEARNED D.R., ON THE OTHER HAND, RELIED UPON TH E ORDERS PASSED BY THE TAX AUTHORITIES BUT COULD NOT PLACE ANY DECISIO N ON RECORD IN SUPPORT OF THE VIEW TAKEN BY THE TAX AUTHORITIES THAT IN THE S UBSEQUENT YEAR THE BALANCE 10% ADDITIONAL DEPRECIATION IS NOT ADMISSIB LE. IN OTHER WORDS, NO CONTRARY DECISION WAS PLACED BEFORE US TO SUPPORT T HE STAND OF THE REVENUE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY P ERUSED THE RECORD. IN THE LIGHT OF THE DECISIONS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE WE ARE OF THE VIEW THAT UNDER SECTION 32(1)(IIA) OF TH E INCOME TAX ACT THERE IS NO EMBARGO ON THE ASSESSEE TO CLAIM THE BALANCE ADDITI ONAL DEPRECIATION IN THE SUBSEQUENT YEAR IF IN THE FIRST YEAR THE ASSESSEE W AS UNABLE TO CLAIM 20% DEPRECIATION BY VIRTUE OF PROVISO TO SECTION 32(1)( IIA). THEREFORE, BY RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT (CI TED SUPRA) WE DIRECT THE AO TO ALLOW THE CLAIM OF DEPRECIATION OF 10% IN THE YE AR UNDER CONSIDERATION. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE COMPANY IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2014. SD/- SD/- ( D. KARUNAKARA RAO ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATED: 17 TH SEPTEMBER, 2014 ITA NO. 7015/MUM/2012 M/S. WELLKNOWN POLYSTERS LTD. 3 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 8, MUMBAI 4. THE CIT 4, MUMBAI CITY 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.