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TMI Blog2017 (9) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... g equipments / computer peripherals, covered under the Computers - 60% OR 25% - Held that:- Following the decision rendered by Hon’ble jurisdictional High Court in case of CIT vs. BSES Rajdhani Powers Ltd.(2010 (8) TMI 58 - DELHI HIGH COURT) we are of the considered view that the assessee is entitled for depreciation of computer / integral equipments @ 60% as against 25% allowed by the AO. Depreciation on electrical installation - @ 25% applicable on the plant and machinery - AO allowed the depreciation @ 15% on the electrical installation used for more than 180 days and @ 7.5% for the installation used less than 180 days - Held that:- Hon’ble Supreme Court in case cited as CIT vs. Taj Mahal Hotel (1971 (8) TMI 2 - SUPREME Court) and Anand Theatres (2000 (5) TMI 4 - SUPREME Court) held that electrical installations are to be regarded as plant and machinery for the purposes of depreciation in the scheme of section 32 of the Act. So, when electrical installations are treated as plant the depreciation has to be allowed @ 25% as per provisions contained u/s 32 of the Act. Deduction u/s 10A is required to be taken before setting off brought forward losses and unabsorbed deprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Computer System and instead allowing the depreciation on the said items @ 25% holding the same to be in the nature of Plant Machinery 4. That the assessing officer erred on facts and in law in disallowing depreciation to the extent of 2,35,371 on electrical installation holding the same to be eligible for depreciation @ 15% as opposed to 25% applicable to plant and machinery. 5. That the assessing officer erred on facts and in law in concluding that the deduction under section 10A of the Act is to be computed after setting off of brought forward losses and unabsorbed depreciation. 5.1. That the assessing officer erred on facts and in law in not allowing carried forward of brought forward losses of ₹ 34,99,523 and unabsorbed depreciation of ₹ 2,05,013 for set off in the subsequent assessment years. 5.2. Alternatively, that the learned AO erred in not setting off the unabsorbed depreciation against the interest income to the extent of ₹ 2,05,013/-. 6. That the Assessing Officer erred on facts and in law in charging interest under section 234B and 234C of the Income Tax Act, 1961. 2. Briefly stated the facts n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shows that this view has been taken by the AO merely on the ground that the decision rendered by ld. CIT (A) in assessee s own case for AY 2004-05 holding the principle of making the similar adjustment from the total turnover in case some adjustment is made from the export turnover has not been accepted by the Department as the appeal before the Tribunal is pending. 7. However, the appeals filed by the Revenue in assessee s own case for AY 2003-04 and 2004-05 challenging the decision of ld. CIT (A) have already been dismissed and further appeals filed by the Revenue in the Hon ble Delhi High Court haves also been dismissed vide order dated 14.11.2001, available at pages 26 to 28 of the paper book. 8. Coordinate Bench of the Tribunal in assessee s own case for AY 2004-05, available at pages 1 to 10 of the paper book, settled the identical issue in favour of the assessee by following the decision rendered by ITAT, Delhi Bench in case of DCIT vs. Binary Sematics 109 TTJ 556 wherein it is held that, the total turnover in the denominator and export turnover in the numerator have to be read in the same manner and directed the AO to exclude these items from the total turn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher rate of 60% 12. The Revenue has failed to bring on record if the decision rendered by Hon ble Delhi High Court in case cited as CIT vs. BSES Rajdhani Powers Ltd. (supra) is under challenge. Case law relied upon by ld. DR cited as Smt. Tarulata Shyam and Ors. (supra) is not applicable to the facts and circumstances of this case. So, following the decision rendered by Hon ble jurisdictional High Court in case of CIT vs. BSES Rajdhani Powers Ltd. (supra), we are of the considered view that the assessee is entitled for depreciation of computer / integral equipments @ 60% as against 25% allowed by the AO. So, grounds no.3 3.1 are decided in favour of the assessee. GROUND NO.4 13. Assessee claimed depreciation on electrical installation @ 25% applicable on the plant and machinery. However, the AO allowed the depreciation @ 15% on the electrical installation used for more than 180 days and @ 7.5% for the installation used less than 180 days. 14. Ld. AR for the assessee by relying upon the decision rendered by Hon ble High Court of Gujarat in CIT vs. Express Resorts Hotels Ltd. (2015) 56 taxmann.com 171 (Gujarat) contended that electrical ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded section will have to be construed from the language used and not merely from the fact that it has been retained in Chapter III. The introduction of the word deduction in section 10A by the amendment, in the absence of any contrary material, and in view of the scope of the deductions contemplated by section 10A has to be understood as embodying a clear enunciation of the legislative decision to alter the nature of the section from one providing for exemption to one providing for deductions. Though the difference between the two expressions exemption and deduction , broadly may appear to be the same, i.e., immunity from taxation, the practical effect of it in the light of the specific provisions contained in different parts of the Act would be wholly different. The above implications, would be obvious where loss making eligible units or non-eligible assessees seek the benefit of adjustment of losses against profits made by eligible units. Sub-section (4) of section 10A which provides for pro rata exemption, necessarily involving deduction of the profits arising out of domestic sales, is one instance off deduction provided by the amendment. Profits of an eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 10A and sub-sections (1A) and (4) of section 10A provide that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous circular of the Department understood the situation, it is logical and natural that the, deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggregate of the incomes under other heads and the provisions for set off and carry forward contained in sections 70, 72 and 74 of the Act would be premature for application. The deduction under section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. The somewhat discordant use of the expression total, income of the assessee in section 10A can be reconciled by understanding the expression total income of the assessee in section 10A as total income of the undertaking . Therefore, though section 10A, as amended, is a provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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