2014 (4) TMI 1270 - AT - Income Tax

Disallowance of additional depreciation - asset put to use - CIT-A confirming the action AO in holding that the appellant company was not entitled to additional depreciation @ 10% on the plant and machinery which were installed last year i.e. asst. year 2008-09, as in the last year additional depreciation @ 10% was only claimed because these machineries were installed after 30-9-2007, thereby used for less than 180 days - HELD THAT - Respectfully following the order of Tribunal in assessee s own case we decide the appeal in favour of the assessee. Accordingly, the disallowance of additional depreciation is deleted.

Summary

Issues: Disallowance of additional depreciation

Analysis:
The appeal was filed against the order by Ld. CIT(A)-4, Mumbai for the assessment year 2009-10. The grounds of appeal focused on the disallowance of additional depreciation amounting to Rs. 29,90,195. The main contention was that the appellant company was entitled to additional depreciation at 10% on plant and machinery installed in the previous year (assessment year 2008-09) as they were used for less than 180 days. The Ld. A.R argued that the grounds raised were favorably covered by a previous Tribunal order for the assessment year 2007-08 in the case of the assessee. The Tribunal, after considering the arguments and relevant decisions, concluded that the issue was squarely covered by previous decisions and directed the AO to allow the claim of the assessee for additional depreciation. Consequently, the disallowance of additional depreciation was deleted, and the appeal was decided in favor of the assessee. The order pronounced on 09/04/2014 confirmed the allowance of additional depreciation and dismissed the grounds pertaining to section 154 as infructuous.

This judgment primarily revolved around the disallowance of additional depreciation claimed by the assessee for the assessment year 2009-10. The key issue was whether the appellant company was entitled to claim additional depreciation at 10% on plant and machinery installed in the previous year. The Tribunal referred to a previous order in the case of the assessee for the assessment year 2007-08, where a similar issue was addressed and decided in favor of the assessee. The Tribunal relied on the decisions of Co-ordinate Benches and directed the AO to allow the claim for additional depreciation based on the merits of the case. The Tribunal's decision was influenced by the previous rulings and set aside the order of the CIT(A) to confirm the allowance of additional depreciation. The judgment highlighted the importance of consistency in decisions and adherence to precedents in tax matters to ensure fair treatment for taxpayers.

Overall, the judgment provided clarity on the entitlement of the appellant company to claim additional depreciation on plant and machinery installed in the previous year. By referencing previous decisions and considering the arguments presented, the Tribunal concluded that the disallowance of additional depreciation was not justified in this case. The judgment underscored the significance of legal precedents and consistency in decision-making to uphold the rights of taxpayers and ensure fair treatment in tax assessments.