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TMI Blog2018 (3) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... ery in the year prior to the previous year relevant to current assessment year. In that year, the said plant and machinery was under capital work-in-progress. The plant has started from 01.07.2011 and all the capital assets purchased by 31.3.2011 and shown as capital work-in-progress were transferred to respective assets on 31.03.2012. CIT (Appeals) has himself given a clear finding that the plant and machinery purchased in the financial year 2010-11 which is subsequent to the date specified for the allowance of the additional depreciation in the Act, i.e., 31.03.2005. We do not find any reason why the assessee should be denied additional depreciation. It is clear that the machineries in dispute were acquired after the date specified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation @ 15% i.e. ₹ 1,26,65,451/- and additional depreciation @ 20% i.e. ₹ 34,94,657/- on plant and machinery pertaining to f.y. 2010-11. Since the assessee had purchased the aforesaid fixed assets in f.y. 2010-11 and not in the financial year under consideration i.e. F.Y. 2011-12, the Assessing Officer disallowed 35% of cost of assets towards deprecation and additional depreciation under the head plant and machinery i.e. ₹ 1,94,42,965/- and added the same to the total income of the assessee. 4. Before the ld. Commissioner of Income Tax (Appeals), the assessee appealed against the disallowance both of depreciation as well as additional depreciation. 5. With regard to the additional depreciation, the assessee sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n such plant and machinery, additional depreciation should not be allowed. 4.06 It is the contention of the assessee that the plant and machinery though purchased in F,Y,2010-11 was put into use for the first time in F.Y.2011-12, the additional depreciation must be allowed in Assessment Year 2012-13. 4.07 It is the contention of the assessee that the additional depreciation on plant and machinery amounting to Rs,1,14,42,964 be allowed in full during Assessment 6. Considering the submissions of the assessee, the ld. Commissioner of Income Tax (Appeals) deleted the addition with regard to the disallowance of depreciation. However, he retained the disallowance with respect to claim of additional depreciation. The order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation @ 20 per cent cannot be allowed because as per clause (iia) of section 32(1), additional depreciation @ 20 per cent will be allowable to an assessee engaged in the business of manufacture or production of any article or thing. In this case, the assessee has started production in the subject assessment year. It was not already engaged in the business while the new assets were purchased. All the assets were purchased in the previous year when the factory was under construction. The assessee was not engaged in any business of manufacture or production when the new machinery and plant were acquired. Therefore, the assessee is eligible only for the initial depreciation and not the additional depreciation. Accordingly, additional dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled both to the depreciation as well as additional depreciation. 9. Per contra, the ld. Departmental Representative relied upon the orders of the authorities below. 10. We have carefully considered the submissions and perused the records. Before proceeding further we may gainfully refer to the provision of section 32(1)(iia) of the Act and the same reads as under: Depreciation. 32. (1) In respect of depreciation of- ( iia) in the case of any new machinery or plant (other than ships and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing or in the business of generation, transmission or dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation or otherwise) in computing the income chargeable under the head Profits and gains of business or profession of any one previous year; 11. A reading of the above indicates that the assessee is entitled to additional depreciation in case of new machinery or plant which are acquired and installed after 31.03.2005 by the assessee engaged in the business of manufacture or production of any article or thing. In the present case, the assessee has acquired the plant and machinery in the year prior to the previous year relevant to current assessment year. In that year, the said plant and machinery was under capital work-in-progress. The plant has started from 01.07.2011 and all the capital assets purchased by 31.3.2011 and shown a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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