2022 (2) TMI 1464 - HC - Income Tax

Additional depreciation u/s 32(1)(iia) - assets purchased and acquired before 31.03.2002 - HELD THAT - On going through the impugned order we find the particulars regarding date of pro forma invoice, the date of original invoice, date of acquisition, date of installation as per certificate, date of entry in the books of accounts and the amount including insurance, installation etc. have been furnished in a tabular form. Tribunal after going through the fact found that all the machinery have been purchased much after 1.4.2002. This factual position was in fact analysed by the assessing officer and the claim for additional depreciation was granted by order dated 30.11.2004 u/s 143(3) of the Act. Thus we find that on facts the Tribunal was convinced that the assessee would be entitled to the claim for additional depreciation in respect of the machinery which they have acquired, which has been used for the purpose of business. Assessee was able to establish that by installing the new machinery they have increased production capacity by more than 27%. No substantial question of law.

Summary

Issues:
1. Delay in filing the appeal.
2. Entitlement to additional depreciation under Section 32(1)(iia) of the Income Tax Act, 1961.

Analysis:
1. Delay in filing the appeal:
The High Court of Calcutta noted a delay of 715 days in filing the appeal and examined the reasons provided in the affidavit for the delay. The court found the reasons unsatisfactory but decided to exercise discretion and condone the delay based on the request from the appellant's counsel and the respondent's willingness to proceed on the merits of the matter.

2. Entitlement to additional depreciation under Section 32(1)(iia) of the Act:
The appeal was filed by the revenue challenging the order of the Income Tax Appellate Tribunal regarding the allowance of additional depreciation on assets. The substantial questions of law raised included whether the Tribunal erred in allowing additional depreciation on assets purchased before a specific date but installed later, and whether the machinery satisfied the eligibility criteria for the claim. The court considered arguments from both parties' counsels.
The court analyzed the facts and previous orders, noting that the assessing officer had previously granted the claim for additional depreciation. The Tribunal, upon reevaluation, found that the machinery in question was purchased after the specified date but before the installation. The court observed that the machinery was used for business purposes, leading to an increase in production capacity. Based on these findings, the court concluded that there was no substantial question of law for consideration in the appeal.
As a result, the appeal was dismissed, and the application for stay was closed accordingly.