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TMI Blog2018 (5) TMI 1168X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 25-4-2018 - MR. AKIL KURESHI AND MR. B. N. KARIA, JJ. For The Petitioner : Mrs Mauna M Bhatt(174) For The Respondent : Mr B S Soparkar(6851) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The Revenue seeks draft amendment of the three Tax Appeals, which is granted. 2. These three Tax Appeals arise out of the common judgment of the Income Tax Appellate Tribunal and concern the same assessee. Tax Appeal No.272 of 2018 pertains to A.Y. 2006-07, Tax Appeal No.275 of 2018 pertains to A.Y. 2010-11 and Tax Appeal No.276 of 2018 pertains to A.Y. 2009-10. 3. In the amended appeals, the Revenue has proposed the following questions for our consideration; Tax Appeal No.272/2018: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had purchased new machinery in the month of July 2005 by importing the same at a cost of ₹ 6.31 Crores (rounded off). According to the assessee, such machinery was used for its manufacturing activity till 01.10.2005, when the assessee leased out such machinery to Arvind Mills Ltd., out of which it earned rental income. 5. In the Return the assessee had filed for the A.Y. 2006-07, the assessee had claimed normal depreciation on installation and use of such machinery. Since the machinery was newly purchased, the assessee also claimed additional depreciation u/s.32(1)(iia) of the Income Tax Act, 1961. The Assessing Officer, however, while framing scrutiny assessment, was of the opinion that there was no proof that the mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the additional depreciation would also be available for a period when the plant and machinery was leased. 8. In the later two years involving Tax Appeal Nos.275/2018 and 276/2018, we are concerned only with the normal depreciation u/s.32(1) of the Act and the claim of additional depreciation does not arise in these appeals. 9. We may first tackle the issue of assessee s claim of normal depreciation in the later years, which the Revenue objects to. Section 32 of the Act, as we know, pertains to depreciation. In terms of subsection (1) thereof, in respect of building, plant, machinery or furniture, being tangible assets, owned wholly or partly by the assessee and used for the purpose of business or profession, depreciation is avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the plant, machinery and building as Income from other sources , the depreciation under subsection (1) of Section 32 of the Act would, thus, be available in view of clause( ii) of Section 57 r/w. Section 32(1) of the Act. In the later two years, this being the only controversy, the same must rest here. 11. In the first year, i.e. A.Y. 2006-07, we may recall, the assessee, in addition to the normal depreciation, had claimed additional depreciation in terms of subclause (iia) of subsection (1) of Section 32. This is on the premise that the assessee had purchased new machinery and plant for the purpose of its manufacturing activity. Factually, it has been concluded by the CIT(A) and the Tribunal that the assessee did purchase such plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to such additional depreciation. The fact that such machinery was leased by the assessee in favour of Arvind Mills Ltd. would be of no consequence. We are conscious that the assessee had not utilized such machinery for its own manufacturing activity throughout the year. However, the assessee would contend that in the later portion of the year, the machinery was, actually, put to use by the lessee and therefore, the assessee s claim of hire depreciation would, in any case, would not be harmed. 13. It is, in this context, the assessee would place heavy reliance on the provisions contained in clause( ii) of Section 57 of the Act. The Revenue, on the other hand, contends that the depreciation referred to in clause( ii) of Section 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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