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TMI Blog2016 (4) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. In fact, the CIT(A) has granted additional depreciation for assessment year 2003-04. This was challenged by the Revenue before this Tribunal. The Tribunal confirmed the order of the CIT(A) wherein additional depreciation was allowed. In view of the above, this Tribunal is of the considered opinion that the assessee is eligible for additional depreciation as claimed - Decided in favour of assessee Depreciation on goodwill - Held that:- Goodwill is nothing but an intangible asset. Explanation 3 to sec.32 clearly says that intangible assets being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, is eligible for depreciation. The goodwill being a commercial right acquired by the assessee is eligible for depreciation u/s 32 of the Act. Therefore, the CIT(A) has rightly allowed the claim of the assessee - Decided in favour of assessee Provision made for doubtful advances - Held that:- The assessee claims that the provision which was made earlier was added back to the total income and offered for taxation. Once the advance made by the assessee was subject matter of taxation at the time of provision, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed liabilities, they need to be added back to the book profits while making adjustment u/s 115JB of the Act - I.T.A.No.1034 & 344/Mds/2012 & 457/Mds/2014, ./I.T.A.No.1085 & 448/Mds/2012 & 468/Mds/2014 - - - Dated:- 4-3-2016 - SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER For The Assessee : Shri S.Sridhar, Advocate For The Department : Dr. Milind Madhukar Bhusari, CIT ORDER PER N.R.S.GANESAN, JUDICIAL MEMBER Both the assessee and the Revenue filed appeals for assessment years 2006-07 and 2008-09. The Revenue also filed appeal for assessment year 2010-11. Therefore, we heard all the appeals together and disposing of the same by the common order. I.T.A.No.344/Mds/2012 A.Y 2008-09 2. The first ground in assessee s appeal is with regard to disallowance of deduction u/s 80IA of the Act. 3. Shri S.Sridhar, ld. Counsel for the assessee submitted that the assessee claimed deduction u/s 80IA of the Act on the profit earned by way of generating power by windmill and used for captive consumption. The power generated by the assessee by windmill and consumed captively was considered to be a separate unit and the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 80IA of the Act even in respect of the power generated and used for captive consumption. By respectfully following the judgment of the Madras High Court in assessee s own case for assessment year 2001-02, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow deduction u/s 80IA on the profit arising out of generation of power which was used for captive consumption. 6. The next ground of appeal is with regard to disallowance of depreciation on the building added in the captive power plant. 7. Shri S. Sridhar, ld. Counsel for the assessee submitted that the Assessing Officer disallowed the claim of the assessee on the ground that the building constructed by the assessee form part of the block of asset, therefore, he disallowed the depreciation to the extent of ` 56,45,625/-. Placing reliance on the order of this Tribunal in assessee s own case in I.T.A.No. 1633/Mds/2008, the ld. Counsel submitted that this Tribunal by placing reliance on the judgment of the Apex Court in CIT vs Karnataka Power Corporation, 247 ITR 268, confirmed similar addition deleted by the CIT(A) in assessment year 2003-04. 8. We heard Dr.Milind Madhukar Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt dated 18.1.2012. The High Court found that the assessee is eligible for deduction u/s 80IA in respect of the power generated from captive power plant. The only contention of the ld. DR is that the Revenue s SLP filed against the judgment of the High Court is pending before the Apex Court. This Tribunal is of the considered opinion that mere pendency of the SLP before the Apex Court is not a ground to take a different view. Therefore, this Tribunal do not find any infirmity in the order of the CIT(A) and accordingly, the same is confirmed. 14. Coming to the next ground of appeal, Dr.Milind Madhukar Bhusari, ld. DR submitted that the assessee claimed depreciation on goodwill. The Assessing Officer disallowed the claim of the assessee by following the order of Ahmedabad Bench of this Tribunal in the case of Bharabhai J. Vyas vs ITO, 97 ITD 248. The ld. DR submitted that the goodwill is not an intangible asset on which depreciation is allowable. Therefore, the CIT(A) ought to have confirmed the order of the CIT(A). 15. On the contrary, Shri S.Sridhar, ld. Counsel for the assessee submitted that the assessee claimed depreciation on goodwill to the extent of ` 77,81,451/-. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be recovered was written off in the books of account. Since the provision made was already offered for taxation, the amount which was written off has to be allowed as deduction in view of the judgment of the Apex Court in CIT vs TRF Ltd, 323 ITR 397. 20. We have considered the rival submissions on either side and also perused the material available on record. The assessee claims that the provision which was made earlier was added back to the total income and offered for taxation. Once the advance made by the assessee was subject matter of taxation at the time of provision, the same cannot be added to the total income when it was actually written off. This Tribunal is of the considered opinion that disallowing the sum of ` 45,64,022/- would amount to double taxation. In view of the above, this Tribunal is of the considered opinion that the CIT(A) has rightly allowed the claim of the assessee . Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. 21. In the result, the Revenue s appeal is dismissed. I.T.A.No. 1085/Mds/2012-A.Y 2006-07 22. In this Revenue s appeal for assessment year 2006-07, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aptive power plant. 28. Shri S.Sridhar, ld. Counsel for the assessee submitted that an identical issue was considered by this Tribunal in assessee s own case for assessment year 2003-04 in I.T.A.No. 1633/Mds/2008 and found that the assessee is eligible for additional depreciation u/s 36(1)(iia) of the Act. Therefore, according to the ld. Counsel, the assessee is eligible for additional depreciation. 29. On the contrary, Dr.Milind Madhukar Bhusari, ld. DR submitted that the assessee is not eligible for additional depreciation. According to the ld. DR, the machinery on which additional depreciation was claimed was already in use. The machinery on which the assessee claimed additional depreciation was used in the immediately preceding year and not in the year under consideration, therefore, the assessee is not eligible for additional depreciation. Therefore, ld. DR further submitted that he is placing his reliance on the observation made by the CIT(A). 30. We have considered the rival submissions on either side and also perused the material available on record. The issue of additional depreciation on the power plant which is used for captive consumption was subject matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer is directed to allow additional depreciation on the additional plant and machinery. 34. In the result, the assessee s appeal is allowed. I.T.A.No. 468/Mds/2014 A.Y 2010-11 35. In this Revenue s appeal, the first ground is with regard to depreciation on the building which forms part of the captive power plant. 36. We heard Dr.Milind Madhukar Bhusari, ld. DR and Shri S.Sridhar, ld. Counsel for the assessee. In view of the judgment of the Madras High Court in assessee s own case for assessment year 2001- 02 in Tax Case (Appeal) No.757 of 2007, dated 18.1.2012, this Tribunal is of the considered opinion that the assessee is eligible for depreciation on the building which form part of the captive power plant. Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. 37. The next ground with regard to depreciation on goodwill. 38. We heard Dr.Milind Madhukar Bhusari, ld. DR and Shir S.Sridhar, ld. Counsel for the assessee. This Tribunal is of the considered opinion that goodwill is an intangible commercial right, therefore, the assessee is eligible for depreciation under Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad and doubtful debts has to be added back to the book profits, therefore, the Assessing Officer has rightly reopened the assessment. 47. We have considered the rival submissions on either side and also perused the material available on record. The Assessing Officer reopened the assessment on the ground that provision made for bad and doubtful debts was not added back to the book profits. In the original assessment, the Assessing Officer has not discussed anything about the provision made for bad and doubtful debts. Therefore, this Tribunal is of the considered opinion that the Assessing Officer has rightly reopened the assessment by issuing notice u/s 148 of the Act. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. 48. The next ground of appeal is on merits with regard to addition of ` 22,03,700/- being the provision for bad and doubtful debts while computing the book profit u/s 115JB of the Act. 49. We heard Shri S.Sridhar, ld. Counsel and Dr.Milind Madhukar Bhusari, ld. DR also. 50. Section 115JB(2) Explanation 1 (c) clearly says that the book profits computed under the Companies Act are to be increas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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