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2021 (4) TMI 536 - AT - Income TaxDisallowance of additional depreciation - Scope of amendment to section 32(1)(iia) - depreciation claimed by the assessee relates to assets acquired in the preceding assessment year, wherein the assets were used for less than 180 days and only 10% of depreciation was claimed in earlier year - whether CIT(A) has erred in directing the Assessing Officer to allow the assessee s claim of additional depreciation by relying on the decision in the case of Brakes India Ltd 2017 (4) TMI 511 - MADRAS HIGH COURT on the ground that the issue involved relates to the assessment year 2014-15, whereas the amendment to section 32(1)(iia) by Finance Act 2015 came into force only from 01.04.2016 and not retrospectively - HELD THAT - Respectfully following the decision of the Tribunal 2017 (5) TMI 1694 - ITAT CHENNAI , we find no reason to interfere with the order passed by the ld. CIT(A) on this issue. Moreover, the ld. DR has not explained the impact on the amendment made vide Finance Act, 2015 with effect from 01.04.2016 by substituting or in the business of generation or generation and distribution in the existing subsection (iia) to section 32(1) of the Act to the earlier decisions of the Tribunal or the decision of the Hon ble Madras High Court in the case of Brakes India Ltd. v. DCIT 2017 (4) TMI 511 - MADRAS HIGH COURT or the decision of CIT v. Rittal India (P) Ltd. 2016 (1) TMI 81 - KARNATAKA HIGH COURT . Accordingly, the ground raised by the Revenue stands dismissed.
Issues:
Disallowance of additional depreciation claimed by the assessee in the assessment year 2014-15. Analysis: The appeal filed by the Revenue challenged the order of the ld. Commissioner of Income Tax (Appeals) regarding the assessee's claim of additional depreciation. The Assessing Officer noted that the claim related to assets acquired in the previous year, used for less than 180 days, and only 10% depreciation was claimed earlier. The Assessing Officer disallowed the residual 10% depreciation based on section 32(1)(iia) of the Act, following a decision in MM Forgings Ltd. v. Addl. CIT. However, the ld. CIT(A) directed the Assessing Officer to delete the addition made, citing the decision in Brakes India Ltd. v. DCIT and Tribunal's decisions in the assessee's case. The Revenue contended before the Tribunal that the ld. CIT(A) erred in allowing the claim based on Brakes India Ltd., stating the amendment to section 32(1)(iia) by Finance Act 2015 was effective from 01.04.2016 and not retrospective. The assessee's counsel supported the appellate order and Tribunal's previous decisions in the assessee's case. The Tribunal noted that the issue of additional depreciation was previously addressed in the assessee's cases for other assessment years. Referring to the Tribunal's order for the assessment year 2012-13, it was observed that the assessee could claim the balance of additional depreciation in the subsequent year if the new assets were used for less than 180 days. The Tribunal cited the decision of the Hon'ble Jurisdictional High Court in MM Forgings Ltd. v. Addl. CIT, emphasizing that when assets are used for less than 180 days, the assessee is eligible for only 50% of additional depreciation. However, in the present case, as the new asset was used for less than 180 days, the assessee claimed only 10% depreciation in the relevant year, with the balance claimed in the subsequent year. The Tribunal further referenced the decision of the Hon'ble Karnataka High Court in CIT v. Rittal India Private Limited, emphasizing that the balance of the benefit can be claimed in the subsequent assessment year. The Tribunal upheld the ld. CIT(A)'s decision to allow additional depreciation, dismissing the Revenue's appeal. The Tribunal found no reason to interfere with the order, as the ld. DR did not address the impact of the 2015 amendment on previous decisions. In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the order to allow the assessee's claim of additional depreciation. Order pronounced on the 9th April, 2021 at Chennai.
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