9911796707
TMI Blog2016 (4) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee claimed deduction u/s 80IA of the Act. However, the Assessing Officer disallowed the claim of the assessee. The CIT(A) confirmed the order of the Assessing Officer by placing reliance on the order of this Tribunal in the assessee's own case in I.T.A.No. 1029/Mds/2009 dated 5.1.2007 for assessment year 2001-02. The ld. Counsel further submitted that the assessee filed an appeal against the order of this Tribunal for assessment year 2001-02 in I.T.A.No. 1029/Mds/2009 before the Madras High Court. The Madras High Court allowed the claim of the assessee by a judgment dated 18.1.2012 in Tax Case(Appeal) No.757 of 2007. Therefore, the CIT(A) is not justified in placing reliance on the order of this Tribunal for assessment year 2001-02. The ld. Counsel further placed his reliance on the judgment of the Madras High court in the case of Velayudhaswamy Spinning Mills P. Ltd vs ACIT [2012] 340 ITR 477. 4. On the contrary, Dr.Milind Madhukar Bhusari, ld. Departmental Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Bhusari, ld. DR also. According to the ld. DR, the assessee constructed additional building and claimed depreciation @ 20%. The ld. DR submitted that the building was used for generation of power for captive consumption. The assessee claimed before the Assessing Officer that a sum of ` 451.65 lakhs was invested in the construction of property. Therefore, the Assessing Officer treated the value of the building under the block of asset and disallowed the claim of additional depreciation. 9. We have considered the rival submissions on either side and also perused the material available on record. The assessee claimed excess depreciation of ` 56,45,625/- on the additional construction made for generation of electricity which was used for captive consumption. We have gone through the order of this Tribunal for the assessment year 2003-04 in I.T.A.No. 1633/Mds/2008. The assessee claimed 20% additional depreciation. This Tribunal after considering the nature of the building found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 CIT(A) by following the judgment of the Delhi High Court in the case of CIT vs Hindustan Coco Cola Beverages Pvt. Ltd, 238 CTR 1, allowed the claim of the assessee. Therefore, no interference is called for. 16. We have considered the rival submissions on either side and also perused the material available on record. 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. This Tribunal do not find any reason to interfere with the order of the CIT(A). Accordingly, the same is confirmed. 17. The next ground is with regard to the provision made for doubtful advances. 18. Dr.Milind Madhukar Bhusari, ld. DR submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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, the only issue arises for consideration is with regard to depreciation on goodwill. 23. Dr.Milind Madhukar Bhusari, ld. DR submitted that during the year under consideration, M/s Alagappa Cements Pvt. Ltd and Valliammal Lines Pvt. Ltd. got amalgamated with the assessee company. The excess amount of consideration over and above the value of the net asset of the transferor companies were accounted as goodwill in the books of account of the assessee. The Assessing Officer, however, disallowed the claim of the assessee. The CIT(A) found that the assessee is eligible for depreciation on the goodwill. According to the ld. DR, the entire paid-up share capital of the transferor companies were cancelled due to amalgamation. Referring to the copy of the Balance Sheet as on 31.3.2005, more particularly page No.3 of the paper book, the ld. DR submitted that the capital asset was not shown as an asset in the balance sheet. The quantification of the goodwill in the hands of the transferor companies was made only as a balancing f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the material available on record. The issue of additional depreciation on the power plant which is used for captive consumption was subject matter of consideration before this Tribunal in I.T.A.No. 1633/Mds/2008 for the assessment year 2003-04 in assessee's own case. This Tribunal found that the assessee is eligible for additional depreciation. By following the order of this Tribunal in assessee's own case for assessment year 2003-04 and for the reasons stated therein, the Assessing Officer is not justified in disallowing the claim of the assessee. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow additional depreciation on the captive power plant. 31. The next issue is with regard to additional depreciation on addition made to plant and machinery. 32. We heard Dr.Milind Madhukar Bhusari, ld. DR and Shri S.Sridhar, ld. Counsel for the assessee . Section 32(1)(iia) provides for additional depreciation. The objection of the ld. DR is that the assessee made upgradation of the existing machinery, therefore, it is implied that these machineries were already in use. Therefore, the assessee is not eligible for additional depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered opinion that goodwill is an intangible commercial right, therefore, the assessee is eligible for depreciation under Explanation 3 to sec. 32 of the Act. The CIT(A), in fact, by following his own order for assessment years 2006-07 and 2008-09 allowed the claim of the assessee. The CIT(A) has also placed his reliance on the judgment of the Delhi High Court in the case of CIT vs Hindustan Coco Cola Beverages Pvt. Ltd(supra). Since the goodwill being a commercial right within the meaning of Explanation 3 to sec. 32 of the Act, this Tribunal is of the considered opinion that the assessee is eligible for depreciation on the goodwill. Accordingly, the order of the CIT(A) is confirmed. 39. The next ground is with regard to additional depreciation on captive power plant. 40. We heard Dr.Milind Madhukar Bhusari, ld. DR and Shri S.Sridhar, ld. Counsel for the assessee. 41. The very same issue was considered by this Tribunal for assessment year 2003-04 in assessee's own case in I.T.A.No. 1633/Mds/2008. This Tribunal found that the assessee is eligible for additional depreciation on the building used for captive power plant. Therefore, this Tribunal do not find any reason to interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
