PRITHVI PRAKASHAN P.LTD, MUMBAI V. DCIT CIR 3(2), MUMBAI

ITA 7372/MUM/2012

• Counselvise Citation: 737219914 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Keywords: Depreciation; Additional depreciation; Unabsorbed depreciation
• Section: 143(3); 32

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 7089 /MUM./ 2012 ( / ASSESSMENT YEAR : 2 0 0 9 10 ) DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. / APPELLANT V/S M/S. PRI THVI PRAKASHAN PVT. LTD. 189, SANE GURJI MARG CHINCHPOKALI, MUMBAI 400 011 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACP5814A . / ITA NO. 7372/MUM./2012 ( / ASSESSMENT YEAR : 2009 10 ) M/S . PRITHVI PRAKASHAN PVT. LTD. 126, MITTAL TOWER, B WING NARIMAN POINT, MUMBAI 400 021 .. / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 3(2), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AAACP5814A / ASSESSEE BY : MR. NITESH JOSHI / REVENUE BY : MR. SUMIT KUMAR / DATE OF HEARING 1 9 .06.2014 / DATE OF ORDE R 30.06.2014 M/S. PRITHVI PRAKASHAN PVT. LTD. 2 / ORDER , / PER AMIT SHUKLA , J.M. THE SE CROSS APPEALS ARE DIRECTED AGAINST THE IMPUGNED ORDER DATED 5 TH SEPTEMBER 2012, PASSED BY THE LEARNED COMMISSIONER (APPEALS ) V I , MUMBA I, FOR THE QU ANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 20 0 9 10 . 2 . SINCE BOTH THESE APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING COMMON ISSUES ARISING OUT OF IDENTICAL SET OF FACTS AND CIR CUMSTANCES, THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. WE FIRST PROCEED TO DISPOSE OFF THE ASSESSEES APPEAL IN ITA NO.7372/MUM./2012, VIDE WHICH, THE SOLE GROUND RAISED BY THE ASSESSEE READS AS UNDER: THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF ASSESSEES CLAIM OF ADDITIONAL DEPRECIATION OF ` 96,68,689, BEING BALANCE ADDITIONAL DEPRECIATION ON PLANT & MACHINERY PURCHASED AND PUT TO USE FOR LESS T HAN 180 DAYS IN THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2008 09 AND ON WHICH ONLY 50% ADDITIONAL DEPRECIATION WAS ALLOWED. ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE, THE BALANCE ADDITIONAL DEPRECIATION OF ` 96,68,689 SHOULD BE ALLOWED TO TH E ASSESSEE IN THE ASSESSMENT YEAR 2009 10. 3 . FACTS IN BRIEF : THE ASSESSEE HAD ACQUIRED PLANT AND MACHINERY IN THE SECOND HALF OF THE FINANCIAL YEAR 2007 08 I.E., AFTER 30 TH SEPTEMBER 2007, WHICH WAS ELIGIBLE FOR ADDITIONAL DEPRECIATION @ 20% UNDER SECTION 32(1)(IIA) . SINCE THE ASSET WAS ACQUIRED AND PUT TO USE FOR LESS M/S. PRITHVI PRAKASHAN PVT. LTD. 3 THAN 180 DAYS, THEREFORE, DEPRECIATION @ 10% WAS CLAIMED IN THE ASSESSMENT YEAR 2008 09. IN THE YEAR UNDER CONSIDERATION, I.E., ASSESSMENT YEAR 2009 10, THE ASSESSEE HAS CLAIMED ADDITIONAL D EPRECIATION @ 10% OF THE PLANT AND MACHINERY ON THE GROUND THAT THE ADDITIONAL DEPRECIATION WA S ALLOWABLE TO THE ASSESSEE @ 20% AND ONLY 10% WAS CLAIMED IN THE EARLIER YEAR, THEREFORE, BALANCE 10% SHOULD BE ALLOWED IN THIS YEAR. BEFORE THE ASSESSING OFFICE R, THE ASSESSEE SUBMITTED AND STATED AS UNDER: AS PER AMENDED PROVISIONS ADDITIONAL DEPRECIATION IS ALLOWABLE AT 20%. IN VIEW OF THE FACT THAT THE FURTHER DEPRECIATION IS IN THE NATURE OF AN INCENTIVE AND A ONETIME DEDUCTION, FULL DEDUCTION SHOULD BE A LLOWED TO THE ASSESSEE EVEN IN RESPECT OF ADDITIONS MADE FOR LESS THAN 180 DAYS. ASSESSEE HAS RELIED ON DECISION OF HON'BLE ITAT MUMBAI IN THE CASE OF M/S. CHERYL LABORATORIES PVT. LTD. 4 . HOWEVER, THE ASSESSING OFFICER HELD THAT THE SECOND PROVISO TO SEC TION 32(1), CLEARLY STATES THAT THE ASSET , WHICH HAS BEEN PUT TO USE FOR 180 DAYS, THE DEDUCTION SHALL BE RESTRICTED TO 50% EVEN IN CASE OF ASSETS UNDER CLAUSE 32(1)(IIA). THUS, THE ASSESSEES CONTENTION THAT DEPRECIATION SHOULD BE ALLOWED AT FULL @ 20% PA RTLY IN THIS YEAR AND PARTLY IN THE SUBSEQUENT YEAR, CANNOT BE ALLOWED AND ADDITIONAL DEPRECIATION CANNOT BE AVAILABLE FOR CARRY FORWARD. ACCORDINGLY, HE DISALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION OF ` 96,68,689, MADE IN THIS YEAR. 5 . THE LEARNED COMMIS SIONER (APPEALS) TOO CONFIRMED THE ORDER OF THE ASSESSING OFFICER AFTER OBSERVING AND HOLDING AS UNDER: M/S. PRITHVI PRAKASHAN PVT. LTD. 4 I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE. ASSESSEE HAS ALREADY CLAIMED ADDITIONAL DEPRECIATION @ 10% IN THE PRECEDING ASSESSMENT YEAR BECAUSE MACHINERY WAS INSTALLED AND USED FOR LESS THAN 180 DAYS IN A.Y. 08 - 09 BECAUSE THE PLANT AND MACHINERY WAS ADDED AFTER 30 TH SEPTEMBER OF 2008. THE ADDITIONAL DEPRECIATION IS ALLOWABLE @ 20% OF THE NEW PLANT AND MACHINERY ACQUIRED AND USED DURING THE YEAR AS PER SECTION 32(1)(IIA) OF LT. ACT, WHEREAS. SECOND PROVISO TO SECTION 32(1) PROVIDES THAT WHERE SUCH ASSET IS ACQUIRED BY THE ASSESSEE DURING THE PREVIOUS YEAR AND PUT TO BUSINESS USE FOR LESS THAN 180 DAYS THEN ADDITIONAL DEPRECI ATION CLAIMED WILL BE RESTRICTED TO 50% AND THERE IS NO OTHER PROVISION WHETHER THE OTHER 50% WILL BE ALLOWED TO BE CARRIED FORWARD OR WILL BE ALLOWED TO THE ASSESSEE IN ANY OTHER MANNER AND, THEREFORE, IT IS CLEAR THAT THE BENEFIT IS RESTRICTED TO 50% ON ACCOUNT OF ADDITIONAL DEPRECIATION BECAUSE IT IS USED FOR LESS THAN 180 DAYS IN THE PREVIOUS YEAR IN WHICH IT IS PURCHASED, WHEREAS, ASSESSEE HAS CLAIMED THAT THE BALANCE 50% WHICH WAS RESTRICTED IN THE PRECEDING YEAR IS ALLOWABLE IN THE SUCCEEDING YEAR BE CAUSE IT IS A BENEFICIAL PROVISION AND, THEREFORE, THE ASSESSEE HAS CLAIMED IT IN THE YEAR UNDER CONSIDERATION @ 10% WHICH COULD NOT BE CLAIMED IN PRECEDING YEAR BECAUSE OF THE RESTRICTIONS OF THE PROVISO TO SECTION 32(1). LAW IS VERY CLEAR ON THIS ISSUE A ND THERE IS NO NEED TO MAKE ANY FURTHER INTERPRETATION BECAUSE SIMPLE READING OF THE PROVISO SUGGEST THAT WHATEVER IS THE BENEFIT PROVIDED TO THE ASSESSEE AS INCENTIVE OR OTHERWISE AS ADDITIONAL DEPRECIATION IS ALLOWED UPTO 50% ONLY IF THE USE IS LESS THAN 180 DAYS. HAD THERE BEEN ANY INTENTION OF THE LEGISLATURE TO ALLOW THIS BENEFIT IN SUBSEQUENT YEARS THEN THE SAME WOULD HAVE BEEN PROVIDED IN SOME MANNER IN THE ACT ITSELF. CLAIM FOR DEPRECIATION U/S 32(1) IS ALSO ON SAME FOOTING AND IT IS RESTRICTED TO 5 0% IF THE USE OF THE ASSET IS FOR LESS THAN 180 DAYS AND THE RESTRICTED AND DISALLOWED BALANCE 50% OF DEPRECIATION IS NOT ALLOWED ANYWHERE IN ANY FORM OF IN THE SUBSEQUENT YEARS EXCEPT THAT ON THE WRITTEN DOWN VALUE ASSESSEE GETS DEPRECIATION AS USUAL IN SUBSEQUENT YEARS AND SO IS THE CASE OF ADDITIONAL DEPRECIATION, ASSESSEE WILL GET DEPRECIATION IN T.HE USUAL MANNER IN SUBSEQUENT YEARS. THE RESTRICTION PUT BY THE SECOND PROVISO TO ADDITIONAL DEPRECIATION CANNOT BE TREATED IN A DIFFERENT MANNER THEN THE N ORMAL DEPRECIATION BECAUSE BOTH ARE RESTRICTED IN THE SAME PROVISO ON SAME FOOTINGS. THEREFORE, IT IS CLEAR AND THERE CAN BE NO DOUBT M/S. PRITHVI PRAKASHAN PVT. LTD. 5 THAT CARRY FORWARD OF ADDITIONAL DEPRECIATION OR .CLAIM IN SUBSEQUENT YEAR IS NOT ALLOWABLE. THERE CANNOT BE TWO OPINIONS ABOUT IT AND ONLY ONE INTERPRETATION OF THE PROVISO IS POSSIBLE. HENCE, IT WAS A MISTAKE APPARENT FROM RECORD AND, THEREFORE, THE SAME HAS BEEN RIGHTLY RECTIFIED BY THE A.O. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS REJECTED. 6 . BEFORE US, THE LEARNED COUNSEL, MR. NITESH JOSHI, APPEAR ING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THIS POINT IN ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN MITC ROLLING MILLS PVT. LTD. V/S JCIT, ITA NO.2789/MUM./2012, ORDER DATED 13 TH MAY 2013 , AND THE TRIBUNAL, COCHIN BENCH, IN APOLLO TYRES V/S ACIT, ITA NO.616/COCH. /2011, ORDER DATED 20 TH DECEMBER 2013. HE SUBMITTED THAT IN T HESE CASE S , THE TRIBUNAL, AFTER CONSIDERING VARIOUS DECISIONS, HAS HELD THAT THE ASSESSEE WOULD BE ENTITLED FOR CLAIMI NG BALANCE 10% OF DEPRECIATION OUT OF 20% IN THE SUBSEQUENT YEAR. BECAUSE SECTION 32(1)(IIA) DOES NOT PROVIDE THE YEAR IN WHICH ADDITIONAL DEPRECIATION HAS TO BE ALLOWED, IT SIMPLY SAYS THAT THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION EQUAL TO 20/ % OF THE COST OF MACHINERY AND THE PROVISO TO SECTION 32(1)(IIA), PROVIDES THAT IF THE MACHINERY HAS BEEN ACQUIRED FOR THE PURPOSE OF BUSINESS FOR LESS THAN 180 DAYS, THE DEDUCTION SHALL BE RESTRICTED TO 50%. THE ASSESSEE WILL GET THE BALANCE 50% IN THE SU BSEQUENT YEAR I.E., BALANCE @ 10% OF THE ADDITIONAL DEPRECIATION WOULD BE ALLOWABLE IN THE SUBSEQUENT ASSESSMENT YEAR. 7 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, STRONGLY RELYING UPON THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), SUBMI TTED THAT THERE CANNOT BE ANY PRESUMPTION FOR CARRY FORWARD OF ADDITIONAL DEPRECIATION IN THE SUBSEQUENT YEAR IF IT IS NOT CLEARLY PROVIDED IN THE ACT. M/S. PRITHVI PRAKASHAN PVT. LTD. 6 8 . WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE CAS E LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS PURCHASED / ACQUIRED PLANT AND MACHINERY AFTER 30 TH SEPTEMBER 2007, WHICH WAS ELIGIBLE FOR ADDITIONAL DEPRECIATION @ 20% UNDER THE P ROVISIONS OF SECTION 32(1)(IIA), WHICH PROVIDES THAT IN CASE OF ANY NEW PLANT OR MACHINERY WHICH HAS BEEN ACQUIRED AND INSTALLED AFTER 31 ST MARCH 2005, A FURTHER SUM EQUAL TO 20% OF THE ACTUAL COST OF SUCH MACHINERY OR PLANT SHALL BE ALLOWED AS DEDUCTION UNDER CLAUSE (II). SINCE THE ASSETS WERE ACQUIRE D AND PUT TO USE FOR THE PERIOD LESS THAN 180 DAYS IN THE ASSESSMENT YEAR 2008 09, THE CLAIM FOR ADDITIONAL DEPRECIATION WAS ELIGIBLE ONLY FOR 50% OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET . THUS, ONLY 10% OF ADDITIONAL DEPRECIATION WAS ALLOWABLE IN THE ASSESSMENT YEAR 2008 09. IN THE ASSESSMENT YEAR 2009 10, THE ASSESSEE HAS CLAIMED THE CARRY FORWARD OF ADDITIONAL DEPRECIATION OF 10% IN THIS YEAR ON THE GROUND THAT THE STATUTE PROVIDES FOR ADDITIONAL DEPRECIATION OF 20% WHICH HAS TO BE ALLOWED TO THE ASSESSEE. WE FIND THAT THIS ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL, DELHI BENCH, IN DICT V/S COSMO FILMS LTD., [2012] 139 ITD 628 (DEL.), ACIT V/S SILL INVESTMENT LTD., 148 TTJ 213 (DEL.) AND TWO DECISIONS AS RELIED UPON BY THE LEARNED COUNSEL. THE TRIBUNAL, COCHIN BENCH, IN APOLLO TYRES LTD. (SUPRA), HAS DISCUSSED AND ANALYSED ALL THE CASE LAWS AND ACCEPTED THAT THE BALANCE 50% OF THE ADDITIONAL DEPRECIATION IS TO BE ALLOWED OR CARRY FORWARD TO THE SUBSEQUENT YEAR. ON A PLAIN READING OF SECOND PROVISO TO SECTION 32(1)(II), IT IS SEEN THAT THE STATUTE PROVIDES THAT IF THE ASSET HAS BEEN PUT TO USE FOR A PERIOD OF LESS THAN 180 DAYS, THEN THE DEDUCTION OF CLAIM OF DEPRECIATION SHOULD BE RESTRICTED TO 50% OF THE AMOUNT CALCU LATED AT THE PERCENTAGE PRESCRIBED. HOWEVER, THE STATUTE IS SILENT ON HOW THE BALANCE ADDITIONAL M/S. PRITHVI PRAKASHAN PVT. LTD. 7 COST / DEPRECIATION UNDER SECTION 32(1)(IIA) IS TO BE ALLOWED IN SUCH CASES. IF A RIGHT FOR ADDITIONAL CLAIM OF 20% OF THE COST HAS BEEN GIVEN TO THE ASSESSEE, THE SAME CANNOT BE DENIED TO THE ASSESSEE AND FULL EFFECT OF THE BENEFIT OF ADDITIONAL COST HAS TO BE GIVEN. FURTHER, NO CONTRARY VIEW HAS BEEN BROUGHT BEFORE US, THEREFORE, WE FIND NO HESITATION IN FOLLOWING THE DECISION OF THE TRIBUNAL. FOR THE SAKE OF READY REFERENCE, THE RELEVANT OBSERVATION OF THE TRIBUNAL, COCHIN BENCH, IN APOLLO TYRES LTD. (SUPRA), IS REPRODUCED BELOW: 10. WE HAVE ALSO CAREFULLY GONE THROUGH THE SECOND PROVISO TO SECTION 32(1)(II) OF THE ACT, WHICH READS AS FOLLOWS: PROVIDED F URTHER THAT WHERE AN ASSET REFERRED TO CLAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA), AS THE CASE 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 AND EIGHTY DAYS IN THAT PREVIOUS YEAR, THE DEDUCTION UNDER THIS SUB - SECTION IN RESPECT OF SUCH ASSET SHALL BE RESTRICTED TO FIFTY PER CENT OF THE AMOUNT CALCULATED AT THE PERCENTAGE PRESCRIBED FOR AN ASSET UNDER CLAUSE (I) OR CLAUSE (II) OR CLAUSE (IIA) AS TH E 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 OF ARTICLE OR THING, THE N, A SUM EQUAL TO 20% OF THE ACTUAL 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 MACHINERY AFTER 31 - 03 - 2005. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE IS ENGAGED IN THE MANUFACTURE OF ARTICLE OR THING. THEREFORE, THE ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION WHICH IS EQUIVALENT TO 20% OF THE ACTUAL COST OF SUCH MACHINERY. THE DISPUTE IS THE YEAR IN WHICH THE DEPRECIATION HAS TO BE ALLOWED. THE ASSESSEE HAS ALR EADY 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 UNDER CONSIDERATION. SECTION 32(1)(IIA) DOES NOT SAY THAT THE YEAR IN WHICH THE ADDITIONAL DEPR ECIATION HAS TO BE ALLOWED. IT SIMPLY SAYS THAT THE M/S. PRITHVI PRAKASHAN PVT. LTD. 8 ASSESSEE IS ELIGIBLE FOR ADDITIONAL DEPRECIATION EQUAL TO 20% OF THE COST OF THE MACHINERY PROVIDED THE MACHINERY OR PLANT IS ACQUIRED AND INSTALLED AFTER 31 - 03 - 2005. PROVISO TO SECTION 32(1)(IIA) SAYS TH AT 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 MACHIN ERY IS PUT TO USE IN ANY PARTICULAR YEAR, THE ASSESSEE IS ENTITLED FOR 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 SUBSEQUENT YEAR. TAKING ADVANTA GE OF THIS POSITION, THE ASSESSEE 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 THE NEXT YEAR 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 TAKEN A SIMILAR GROUND AS TAKEN BEFORE THIS TRIBUNAL THAT THE ASSESSEE CANNOT CARRY FORWARD THE ADDITIONAL DEPRECIATION TO BE ALLOWED IN THE SUBSEQUENT ASSESSMENT YEAR. THE DELHI BENCH OF THIS TRIBUNAL AFTER CONSID ERING 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 ADDITIONAL DEPRECIATION IN THE SUBSEQUENT ASSESSMENT YEAR. IN FACT, THE DELHI BENCH OF THIS TRIBUNAL HAS OBSERVED AS FOLLOWS AT PAGES 641 AND 642 OF THE ITD: ......THUS, THE INTENTION WAS NOT TO DENY THE BENEFIT TO 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 SUBSEQUENT 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 M/S. PRITHVI PRAKASHAN PVT. LTD. 9 INDUSTRIALIZATION AND IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD (SUPRA), THE PROVISIONS RELATED TO IT HAVE TO BE CONSTRUED REASONABLY, LIBERALLY AND PURPOSI VE TO MAKE THE PROVISION MEANINGFUL WHILE GRANTING THE ADDITIONAL ALLOWANCE. THIS ADDITIONAL BENEFIT IS TO GIVE IMPETUS TO INDUSTRIALIZATION AND THE BASIC INTENTION AND PURPOSE OF THESE PROVISIONS CAN BE REASONABLY AND LIBERALLY HELD THAT THE ASSESSEE DESE RVES 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 Y EAR 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 USED I SHALL BE ALLOWED. THUS, THE ASSE SSEE 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 BAL ANCE 50% WILL NOT BE ALLOWED IN SUCCEEDING YEAR. THE EXTRA DEPRECIATION ALLOWABLE U/S 32(1)(IIA) IN AN EXTRA INCENTIVE WHICH HAS BEEN EARNED AND CALCULATED IN THE YEAR OF ACQUISITION BUT RESTRICTED FOR THAT YEAR TO 50% ON ACCOUNT OF USAGE. THE SO EARNED IN CENTIVE 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 THE ORDERS OF THE AUTHORITIES BELOW AND DIRECT TO EX TEND THE BENEFIT. WE ALLOW GROUND NO.2 OF THE ASSESSEES APPEAL. SINCE WE HAVE DECIDED GROUND NO.2 IN FAVOUR OF ASSESSEE, THERE IS NO NEED TO DECIDE 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 R ECTIONS GIVEN BY THE LEARNED CIT(A) ARE NOT PROPER. THE ELIGIBILITY F OR DEDUCTION OF ADDITIONAL M/S. PRITHVI PRAKASHAN PVT. LTD. 10 DEPRECIATION STANDS ADMITTE D , 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 CEN T OF THE DEDUCTION IS TO BE ALLOWED IN THE CURRENT YEAR, I.E ASST.YR. 2006 - 07. THE LEARNED IT(A) HAS MERELY DIRECTED THE VERIFICATION OF THE CONTENTIONS OF THE ASSESSEE AND TO ALLOW THE BALANCE ADDITIONAL DEPRECIATION AFTER SUCH FACTUAL VERIFICATION. ACCORDINGLY, FINDING NO ME RIT 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 PVT LTD (SUPRA). IN VIEW OF THE ABOVE 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 THE DEPRECIATION HAS TO BE ALLOWED IN THE SUBSEQUENT YEAR, THEREFORE, THE ORDERS OF THE LOWER AUTHORITIES ON THIS ISSUE ARE SET SIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF BALANCE 50% ADDITIONAL DEPRECIATION IN THE YEAR UNDER CONSIDERATION. 9 . THUS, FOLLOWING THE AFORESAID DECISION OF THE TRIBUNAL, WE ALLOW THE CLAIM OF BALANCE ADDITIONAL COST / DEPRECIATION TO BE CARRIED FORWARD BY THIS YEAR AND ACCORDINGLY, GROUN D RAISED BY THE ASSESSEE. 10 . 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. WE NOW TAKE UP REVENUES APPEAL BEING ITA NO. 7089/MUM./2012 FOR THE ASSESSMENT YEAR 2009 10. THE SOLE GROUND RAISED BY THE REVENUE, READS AS UNDER: WHETH ER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE A.O. UNDER SECTION 40A(2)(B) OF ` 32,20,315 (I.E., 50% OF ` 64,40,630) PAID TO SISTER CONCERN M/S. MEDIA WORLD ENTERP RISES FOR PURCHASE OF KALDARSHIKA CALENDARS . M/S. PRITHVI PRAKASHAN PVT. LTD. 11 11 . THE ASSESSEE COMPANY, DURING THE YEAR UNDER CONSIDERATION, HAS PAID SUM OF ` 64,40,630, ON ACCOUNT OF PURCHASE OF KALDARSHIKA CALENDARS. THESE CALENDARS WERE PURCHASED FROM MEDIA WORLD ENTERPRISE, THE CONC ERN COVERED WITHIN THE PROVISIONS OF SECTION 40A(2)(B). THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS PURCHASED THESE CALENDARS IN BULK @ ` 10 PER CALENDAR AS AGAINST THE RATE OF ` 7.30 PER CALENDAR SOLD BY MEDIA WORLD TO OTHER PERSONS. THE ASSESSIN G OFFICER, FOLLOWING THE EARLIER YEARS PRECEDENCE, HAS DISALLOWED 50% OF THE PURCHASE PRICE AND MADE DISALLOWANCE OF ` 32,20,315. 12 . BEFORE THE LEARNED COMMISSIONER (APPEALS), IT WAS SUBMITTED THAT THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY TH E TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06 AND 2006 07. THE LEARNED COMMISSIONER (APPEALS), FOLLOWING THE EARLIER YEARS ORDER OF THE TRIBUNAL, DELETED THE SAID ADDITION. 13 . BEFORE US, IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE STANDS COVERED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06 TO 2007 08. 14 . AFTER HEARING THE RIVAL CONTENTIONS OF THE PARTIES AND ON A PERUSAL OF THE FINDINGS OF THE AUTHORITIES BELOW AS WELL AS THE ORDERS OF THE EARLIER YEAR OF THE TRIBUNAL, WE FIND THAT THIS ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE ASSESSMENT YEAR 2005 06, 2006 07 AND 2007 08. THE TRIBUNAL, IN ITA NO.151 AND 142/MUM./2011, FOR THE ASSESSMENT YEAR 2007 08, VIDE ORDER DATED 6 TH FEBRUARY 2013, HAS DECIDED T HIS ISSUE IN THE FOLLOWING MANNER: M/S. PRITHVI PRAKASHAN PVT. LTD. 12 2. GROUND NO.1 RELATES TO CONFIRMING THE DISALLOWANCE OF RS.15,80,832/ - PAID TO M/S. MEDIA WORLD ENTERPRISES ON THE GROUND OF EXCESSIVENESS AND UN - REASONABILITY. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THA T AN IDENTICAL ISSUE CAME UP FOR CONSIDERATION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 2006, WHERE GROUND NO.1 IS RELEVANT WHICH IS MENTIONED IN PARA 3 OF THE ORDER OF THE TRIBUNAL VIDE ITA NO.1360 & 6246/M/2009, DATED 16.3.201 2 AND RELEVANT DISCUSSION IS GIVEN IN PARA 4. THE TRIBUNAL FOR THE REASONS MENTIONED IN PARA 8, GRANTED RELIEF TO THE ASSESSEE HOLDING THAT NO DISALLOWED IS CALLED FOR AND THE SAID PARA 8 READS AS UNDER: AFTER HEARING RIVAL CONTENTIONS, WE ARE OF THE CO NSIDERED VIEW THAT THE DISALLOWANCE IN QUESTION IS NOT CORRECT FOR THE REASON THAT THE ASSESSEES EXPLANATION IS SATISFACTORY. THE ASSESSEES NAME AND LOGO IS PUBLISHED IN ALL THE 16,85,640 PIECES OF CALENDARS AND NO SEPARATE CHANGES ARE COLLECTED BY MEDIA WORLD ENTERPRISES FOR SUCH ADVERTISEMENT. OUT OF 16,85,640 PIECES OF CALENDARS, ONLY 5,68,295 PIECES OF CALENDARS ARE PURCHASED BY THE ASSESSEE. THE BALANCE CALENDARS ARE SOLD TO OUTSIDERS WITH THE LOGO AND NAME OF THE ASSESSEE. MEDIA WORLD ENTERPRISES, I S A PUBLISHER AND IT IS NOT A MERE PRINTER AS A HINDU CALENDAR, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL REQUIRES MANY INPUTS, MATERIAL AND SPECIALIZED KNOWLEDGE WHICH CAN BE DONE ONLY BY CERTAIN PERSONS HAVING THE EXPERTISE. THE CALENDAR GIVES MUCH I NFORMATION FOR USE OF HINDU PUBLIC. IT IS NOT THE CASE OF THE REVENUE THAT ALL THESE INFORMATION AND MATERIAL OF THE CALENDAR WERE FURNISHED BY THE ASSESSEE. PAYING RS. 2 IN EXCESS PER CALENDAR, FOR GETTING ADVERTISEMENT IN ABOUT MORE THAN 10,00,000 PIECES IS JUSTIFIABLE. IN ANY EVENT, WHEN BOTH, MEDIA WORLD ENTERPRISES AND THE ASSESSEE COMP ANY ARE PAYING TAX AT THE VERY SAME MARGINAL RATE, THE QUESTION OF THE ASSESSEES DIVERTING THE PROFITS DOES NOT ARISE. THERE IS NO LOSS TO REVENUE. HENCE, FOR ALL THES E REASONS, GROUND NO.1 RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 - 2006 IS ALLOWED. 3. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE AND ON FINDING THAT THE ISSUE IS COMMON IN BOTH THE ASSESSMENT YEAR, WE ARE OF THE OPINION THAT THE ASSESSEE IS ENTITLED TO SUCCEED. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED . M/S. PRITHVI PRAKASHAN PVT. LTD. 13 15 . THUS, CONSISTENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN THE AFORESAID DECISION, WE DO NOT FIND ANY MERIT IN THE GROUND RAISED BY THE REVENUE AND UPHOLD THE ORDER OF THE LEARNED COMMISSIONER (APPEALS). ACCORDINGLY, THE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 16 . 1 6 . IN THE RESULT, REVENUES APPEAL IS DISMISSED . 30 TH JUNE 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 30 TH JUNE 2014 SD/ - . D. KARUNAKARA RAO AC COUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE C IT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI