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TMI Blog2015 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets. Thus, for one year if the claim of depreciation is not allowed then the opening written value of the same assets in the succeeding year to the extent of disallowance gets enhanced. In the instant case, in the earlier assessment years additional depreciation claimed by the assessee was not allowed by the Assessing Officer. The view of the Assessing Officer was confirmed by the ITAT. Since the additional depreciation was disallowed in earlier years to the extent of disallowance the written down value is to be enhanced and the depreciation is to be computed accordingly. This claim of the assessee is reasonable and justified and accordingly we direct the AO to compute normal depreciation u/s 32(I)(II) of the Act with reference to the enhanced value of the assets on which additional depreciation is disallowed in the earlier assessment year. - Decided in favour of assessee. - ITA No. 5219/Del/2013 - - - Dated:- 13-1-2015 - Shri N. K. Saini And Shri George George K.,JJ. For the Appellant : Shri Ajay Vohra, Sr. Advocate, Shri Rohit Jain, Advocate And Ms. Deepashree Rao, CA. For the Respondent : Ms. Y. Kakkar. Sr. D.R. ORDER Per Shri George George K, JM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the High Court: and (b) did not raise this issue during assessment proceedings. 3. We shall adjudicate the issues ground-wise as under:- Grounds No.1, 2.1 to 2.4 Above grounds relates to the issue on disallowance of additional depreciation claimed by the assessee amounting to ₹ 8,58,60,045/-. The Assessing Officer disallowed the aforesaid claim for additional depreciation on the ground that the assessee was not engaged in manufacture or production of an article or thing as required u/s 32(1)(iia) of the Act. As regard, the activity of production of bitumen concrete, the Assessing Officer held that the assessee was only mixing cement, sand, aggregate and admixture to form concrete, which activity according to the Assessing Officer could not be regarded as amounting to manufacture or production of any article or thing. 4. On further appeal, the CIT(A) confirmed the order of the Assessing Officer on this issue. The relevant finding of the CIT(A) reads as follows:- 5.1 I have carefully considered the assessment order and the submissions thereof. The facts of the case as per the assessment order are that the assessee filed return of Income declaring incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 w.e.f. 01.04.2006. 6. The Ld. DR submitted that the issue is squarely covered by the order of the Tribunal in assessee s own case for the AY 2004-05 (Supra). 7. We have heard rival submissions and perused the material on record. The Ld. Sr. Counsel appearing on behalf of the assessee contended that the Tribunal s order in assessee s own case for the AY 2004-05 is not applicable to the facts of the instant case, in view of the amendment to Section 32(1)(iia) of the Act w.e.f. 01.04.2006. In order to appreciate whether the amendment will materially effect the issue in question, the pre amended and post amended provision of Section 32(1)(iia) of the Act is reproduced below:- Prior to Amendment The relevant extracts of the provisions of section 32(1)(iia) of the Act as it stood prior to amendment are as under: (iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2002, by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are unable to accept the plea that to the extent of manufacturing of intermediate Bitumen mix, it may be treated as eligible for additional depreciation. In view of fore goings, on merits also the assessee's grounds are rejected. 9. It has been brought to our notice that the above order of the Tribunal has been challenged before the Hon ble High Court and the same is pending for adjudication. We find that the post amended provision of Section 32(1)(iia) clearly stipulate that there should be manufacture or production of article or thing. The Tribunal in AY 2004-05 had categorically held that the intermediary Bitumen mix is not article or thing manufactured or produced by the assessee, therefore, the order of the Tribunal in assessee s own case for AY 2004-05 is squarely applicable to the instant case. Therefore, we uphold the order of the CIT(A) as correct and in accordance with law and no interference is called for. It is ordered accordingly. 10. In the result, the Grounds No.1, 2.1 to 2.4 are rejected. 11. Ground No.3 In the above grounds, the assessee s plea is to recompute normal depreciation u/s 32(1)(ii) of the Act with reference to the enhanced value of ..... 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