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TMI Blog2017 (8) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... and allowed the claim of the assessee as per the provisions of section 32(1)(iia) of the Act. Accordingly, we are fully agreed with the arguments of ld.AR that it cannot be presumed that due to lack of inquiry the prejudicel is caused to the revenue when the issue was not discussed in the order of AO. Claim of the assessee, which is as per law under the provisions of section 32(1)(iia) of the Act, cannot be said to be have caused prejudice to the revenue and therefore, the order is not erroneous as no prejudice was caused to the revenue as the assessee has claimed the additional depreciation as per the provisions of Act which is also supported by number of decisions. - Decided in favour of assessee. - I.T.A. No.3564/Mum/2017 - - - Dated:- 21-8-2017 - SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, (AM) For The Appellant : Shri Ronak G Doshi For The Respondent : Shri Pratap Singh ORDER Per RAJESH KUMAR, Accountant Member : This is an appeal filed by the assessee and is directed against the order of the Ld. CIT, Central-4, Mumbai dated 15.3.2017 passed u/s 263 of the Income Tax Act, 1961 and it is pertaining to A.Y. 2009-10. 2. Only issue raised in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to assets added in second half of the financial year 2010-11, is not allowable in A.Y. 2012-13. 5. A perusal of the records and the assessment order shows that the AO has not made the disallowance of depreciation to the extent of ₹ 2,16,941/- being the additional depreciation claimed in respect of additions in assets made during the second half of the financial year 2010-11 relevant to A. Y. 2011-12. 6. In view of the above, it is clear that there is a failure on the part of the assessing officer to examine the issue of claim of additional depreciation in terms of provisions of section 32(1), which has rendered the impugned assessment order passed vi] s.143(3) of the I.T. Act erroneous, in so far as it is prejudicial to the interests of revenue, in terms of explanation 2 to section 263 of the IT. Act. 6. In view of the above, you are requested to show cause as to why the said assessment order should 'not be revised u/s.263 of the l.T. Act, 1961. Your objections, if any, to the proposed revision of the assessment order may be filed before the undersigned on or before 24.02.2017. 7. The date of hearing is fixed for this purpose on 24.02.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r second proviso to section 32(1)(ii}. The second proviso to section. 32(1)(ii} only creates a restriction with respect to the time over which additional deprecation could be claimed. 1.3) The second proviso to section 32(1)(ii} does not affect the vested right of the assessee towards additional depreciation which it gets by making investment in the new machinery or plant. One may state that the assessee earns his entitlement towards additional depreciation as soon as he incurs a cost on acquisition of plant or machinery. The entitlement towards additional depreciation crystallizes with the event of incurrence of cost on plant or machinery and has no relation with the WDV of the block of asset. In other words, a right to claim full additional depreciation vests with an assessee as soon as he incurs cost on acquisition and installation of a new machinery or plant during the relevant previous year. 1.4) Therefore the assessee, in view of several judicial pronouncements, has claimed additional depreciation u/ s.32(1)(iia) This view is neither erroneous nor prejudicial to the Revenue and therefore provisions of section 263 cannot be invoked. After having considered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT V/s Gabriel India Ltd. (1993) 203 ITR 108 Bom; and the decision of co-ordinate bench of the Tribunal in the case of Small Wonder Industries V/s CIT in ITA No.2464/Mum/2013 (AY-2009-10) dated 24.2.2017. Even on merits, the ld. AR submitted that there is no bar on the assessee to carry forward the additional depreciation u/s 32(1) (iia) of the Act to claim the same in the subsequent year in view of the fact that in the year of addition to fixed assets, the depreciation was claimed at 50% of the normal depreciation as the assessee was put to use in the second half of the year. In support of this contentions, the ld.AR also relied on the decision of Karnataka High Court in the case of CIT V/s Rittal India(P) Ltd reported in 380 ITR 423) (Kar). Finally, the ld.AR, in view of the facts and circumstances of the case and the ratio laid down by the various authorities submitted that the case of the assessee stands covered in favour of the assessee and exercising the jurisdiction u/s 263 of the Act was wrong and against the provisions of the Act and should be quashed. 6. On the other hand the ld. DR heavily relied upon the order of PCIT by submitting that the setting aside the or ..... 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