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Issues involved: Claim of additional depreciation u/s 32(1)(iia) on new plant & machinery and disallowance of depreciation on new plant and machinery installation. Claim of gratuity amount deduction.
Claim of additional depreciation: The assessee claimed additional depreciation of Rs. 13,05,871 on new plant & machinery worth Rs. 1,74,11,608 installed after September, 2002. AO denied claiming the machinery was not fully acquired and installed after 31-03-2002. CIT(A) upheld AO's decision. Assessee argued that both conditions of acquisition and installation were met after 31-03-2002, entitling them to additional depreciation. The Tribunal agreed, stating that machinery worth Rs. 98,67,031 was acquired and installed after 31-03-2002, fulfilling conditions for additional depreciation. Regarding substantial capacity increase, the Chartered Accountant certified a 25% increase, which was accepted as conclusive evidence. Disallowance was deleted, and AO was directed to allow the claimed depreciation. Disallowance of depreciation on new plant and machinery installation: AO disallowed Rs. 21,76,451 depreciation on new plant & machinery installation, claiming work was not completed by 31-03-2003. CIT(A) upheld the decision. Assessee provided evidence that installation work was completed before 31-03-2003, despite the final bill being dated 31-03-2003. Tribunal noted that running bills were raised before 31-03-2003, indicating installation during the relevant year. As no evidence suggested non-usage of machinery, depreciation was allowed. The assessee's claim for gratuity amount deduction was approved, leading to the deletion of the disallowance of Rs. 85,798. Consequently, the appeal was allowed.
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