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TMI Blog2017 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... harma, AM And Shri Amarjit Singh, JM Assessee by : Shri Manish V.Shah Revenue by : Shri R.P. Meena ORDER Per R. C. Sharma (A.M) These are the appeals filed by the assessee against the order of CIT (CENTRAL)-4, Mumbai dated 15/03/2017 for the A.Y.2012-13 in the matter of order passed u/s.263 of the IT Act. 2. The following common grounds have been taken by both the assessees. GROUND I -INVOKING PROVISIONS OF SECTION 263 OF THE INCOME-TAX ACT, 1961 ("THE ACT"): 1. On the facts and circumstances of the case and in law, the Learned Principal Commissioner of Income Tax - 4, Mumbai ("the Pr. CIT") erred in invoking the provisions of section 263 of the Act and thereby revising the order passed by the Deputy Commissioner of Income Tax - 7(3), Mumbai ("the AO)") u/s. 143(3) of the Act dated February 26, 2016 ("the order") on the alleged ground that the order passed by the AO was erroneous and prejudicial to the interest of the revenue. 2. The Appellant prays that it be held that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the revenue and accordingly the action of the Pr. CIT in invoking provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the return] reveals that the assessee has claimed balance 50% of the additional depreciation under section 32(1)(iia) amounting to ₹ 12,29,935 /- on the additions made in assets during the second half of the financial year 2010-11 relevant to A.Y. 2011-12. 1.3. The quantum of permissible allowance of depreciation under clause (i), (ii) and (iia) to section 32(1) is limited to 50% if the asset has been put to use for the purposes of business for a period less than one hundred and eighty days in the previous year. Further as per the third proviso to Clause (ii) of the sub section (1) of section 32, the balance 50% of the additional depreciation admissible under clause (iia) is allowable in the succeeding previous year, but then this proviso is inserted by the Finance Act, 2015 and is effective prospectively from 01.04.2016 only. Therefore, the balance 50% of the depreciation relating to assets added in second half of the financial year 2010-11, is not allowable in A.Y. 2012-13. 1.4. A perusal of the records and the assessment order shows that the AO has not made the disallowance of depreciation to the extent of ₹ 12,29,935/- being the additional depreciation claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing necessary enquiries and investigation and after ascertaining all the facts on the issue of allowance of additional depreciation. Needless to mention due opportunity should be given to the assessee while completing the assessment afresh. 6. Against the above order of CIT passed u/s.263, the assessee is in further appeal before us. 7. It was vehemently argued by learned AR that merely because an issue has not been discussed in detail in the assessment order, does not indicate that there is lack of inquiry / prejudice caused to the revenue. For this purpose, reliance was placed on the following judicial pronouncements:- 1 CIT v. Gabriel India Ltd. (203 ITR 108) (Born. HC) 2 CIT v. hri T.P. Textiles (P.) Ltd. (394 ITR 48) (Mad. HC) 3 CIT v. Krishna Capbox (P.) Ltd. (372 ITR 310) (All. HC) 4 Small Wonder Industries v. CIT (ITA o. 2464/Mum/2013) (Mum. Trib.) 8. On merit of the addition / disallowance proposed, contention of learned AR was that there is no restriction on assessee to carry forward additional depreciation u/s 32(1)(iia) and claim the same in the subsequent year where only 50 percent of additional depreciation is claimed in the year of purchase on the plea th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing before us. 12. Facts in brief are that assessee is engaged in business of manufacturing of engineering goods. During the A.Y.2011-12, in respect of new plant and machinery, assessee claimed additional depreciation u/s.32(1)(iia). Since machinery was installed and worked for less than six months, the assessee has claimed 50% of additional depreciation in A.Y.2011-12 and claim carry forward of the balance 50% to be set off in the next year i.e., A.Y.2012-13 under consideration. The CIT was of the view that proviso was inserted by the Finance Act 2015, accordingly carry forward and set-off of depreciation was permissible only w.e.f. A.Y. 2016-17. Accordingly, he directed the AO to examine the issue of claim of additional depreciation during the second half of the financial year 2010-11 relevant to the A.Y. 2011-12 with reference to the third proviso to Clause (ii) of Sub Section (1) of Section 32 inserted by the Finance Act 2015. 13. We have considered rival contentions and gone through the orders of the lower authorities. We have deliberated on the judicial pronouncements cited by learned AR. The eligibility to carry forward and set off 50% of the additional depreciation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 2005, applicable with effect from 1-4-2006. Prior to that, a proviso to the said clause was there, provided for the benefit to be given only to a new industrial undertaking, or only where a new industrial undertaking begins to manufacture or produce during any year previous to the relevant assessment year. The aforesaid two conditions, i.e., (the undertaking acquiring new plant and machinery should be a new industrial undertaking or that it should be claimed in one year, have been done by substituting clause (iia) with effect from 1-4- 2006. The grant of additional depreciation under the aforesaid provision, is for the benefit of the assessee and with the purpose of encouraging industrialization, by either setting up a new industrial unit or by expanding the existing unit by purchase of Hew plant and machinery, and putting it to use for the purpose of business. The proviso to clause (ii) of the said section makes it clear that only 50 per cent of the 20 per cent would be allowable, if the new plant and machinery so acquired is put to use for less than 180 days in a financial year. However, it nowhere restricts that the balance 10 percent would not be allowed to be claimed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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