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TMI Blog2019 (8) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... n be ascertained or inferred. In the present case, a perusal of the summary of details and documents furnished on record clearly shows that the relevant invoices in respect of the machinery in question were raised by the concerned supplier only after 01.04.2002 except in case of one machine of small value of ₹ 2.6 lacs and the same, in our opinion is sufficient to show that the machinery in respect of which additional depreciation was claimed by the assessee had been acquired after 01.04.2002. Keeping in view the legal position emanating from the judicial pronouncement in Pr. CIT vs IDMC Ltd. [ 2017 (2) TMI 644 - GUJARAT HIGH COURT] and Lakra Fabrics (P) Ltd.[ 2014 (1) TMI 591 - ITAT CHANDIGARH] and having regard to the facts of the present case, we are of the view that the assessee was entitled to additional depreciation u/s 32(1)(iia) on the plant machinery in question for the year under consideration i.e. AY 2003-04 when the installation was completed and there was no error in the order of the AO passed u/s 143(3) in allowing the same. In that view of the matter, we set aside the impugned order passed by the Ld. CIT u/s 263 on this issue - Decided in favour of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant copies of the invoices, Bill of entry, Challans and installation certificates were also filed before the AO (copies are enclosed for your ready reference). Further pleases note that the purchase dates are noted in the books of account on the basis of the dates of the proforma raised by the suppliers of the machineries. The practice is that on firm booking by the assessee company, the suppliers of machineries raise invoices for the entire amount of the machineries which are either fixed or sent to the assessee immediately. The invoices themselves contain the provisions for making payment by the assessee mostly in instalments. However, the actual delivery of the machineries is made at a much later date in some cases, the supplier undertakes a turn key project after raising of the invoices and thereafter receiving payment of a substantial portion of the amount involved therein, perform the contract of supplying the machineries as well as installing the same. 4. The above explanation offered by the assessee was not found acceptable by the Ld. CIT for the following reasons given in his impugned order u/s 263: i. It is fact that secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee that the purchases were only made after 31.03.2002. She has observed that the assets were actually purchased by the assessee before 01.04.2002 and therefore such assets were not eligible for additional depreciation. The assessee has claimed that though it entered into the negotiation for purchase of machinery during the A.Y. 2002-03 but the purchases were actually materialized only in the previous year i.e. A.Y. 2003-04 wherein the assessee finally purchased the assets, made the payment and also installed the same. The assessee has also made available of the documents and evidences in support of its claim which forms part of the Paper Book. It has also been claimed that all the documents and evidences were filed before the AO and after perusing the same the AO has allowed the claim of additional depreciation to the assessee. 14.1. The ld. CIT as though doubted such claim of the assessee to have finally materialised the purchase only in the previous year and has held that since the part payments were made during the financial year 2001- 02 purchase only materialised in the A.Y. 2002-03 and not in A.Y. 2003-04 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a party would be deprived of remedy. 8. In compliance with the direction given by the Hon ble Calcutta High Court in the judgement delivered on 31.09.2009, the case was fixed for hearing and the arguments of both the sides on the issue relating to additional depreciation have been heard. 9. The learned counsel for the assessee submitted that Hon ble Calcutta High Court has remitted the matter back to the Tribunal with the specific direction to consider the issue of assessee s claim for additional depreciation. He submitted that the entire documentary evidence to show that the machinery was acquired and installed after 01.04.2002 was filed by the assessee before the Tribunal and although there was a reference to the said documentary evidence in the order of the Tribunal dated 31.10.2007, the exact material on which the inference had been drawn by the Tribunal regarding the acquisition and installation of machinery was not specified. He submitted that the Hon ble Calcutta High Court, therefore, has directed the Tribunal to give a finding of fact with reference to the exact material in order to establish the acquisition as well as installation of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same by exercising her power u/s 263. 11. The learned DR contended that the assessee for claiming additional depreciation has to acquire the machinery after 01.04.2002 and since this condition was no satisfied by the assessee in the present case, there was an error in the order of the AO in allowing the claim of the assessee for additional depreciation which was rightly withdrawn by the Ld. CIT vide an order u/s 263. He invited our attention to the details given in the audit report as furnished at page no 24 to point out that the relevant machinery was purchased by the assessee before 31.03.2002. He contended that the acquisition of machinery means acquiring title in the property and since the amount is debited when invoice is raised, there is a transfer of property in the machinery in favour of the assessee. He contended that the date of delivery, date of payment etc are irrelevant and what is relevant is the date of invoice raised by the seller. He contended that the sale of goods is compete when invoice is raised as per the relevant provisions of Sales Tax Act and the assessee thus had acquired the machinery when the relevant invoices were raised by the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal set aside the order of the Ld. CIT u/s 263 on this issue and restore the order of the AO allowing the claim of the assessee for additional depreciation after having found that the purchases of machinery were actually materialised only in the previous year relevant to AY 2003-04 as established on the basis of documents and evidences forming part of the Paper Book. On further appeal preferred by the revenue, Hon ble Calcutta High Court found that the Tribunal while giving the finding on the issue of date of acquisition of machinery did not specifically referred to the exact material on which the inference was drawn. Their lordships held that the Tribunal being a final fact finding authority was not correct in dealing with the matter cursorily and remitted the matter back to the Tribunal to decide the factum of acquisition as well as installation of the machines after ascertaining the terms of payment of consideration, date of delivery, passing of property etc. 15. At the time of hearing before us, the learned counsel for the assessee has invited our attention to the relevant documentary evidence in the form of copies of invoices, delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.v. (Air Compresser with direr) 12.02.2002 (P-105) 29.05.2002 (P-105) 19.07.2002 (Bill of entry P-106 After 19.07.2002 14.08.2002 Certified P-107 18.07.2002 (Additional checklist) P-108 40,28,544.00 4 Maini Meterials Movement Pvt. Ltd. (inplant material) 10.03.2002 (P-109) 30.03.2002 (P-109) 28.04.2002 (Challan) P-110 28.04.2002 (P-111) 10.07.2002 (Additional checklist) P-112 20.07.2002 (Additional checklist) P-112 (same-116) 259,780.00 5 Mukund Ltd. (EOT Crane) 20.10.2001 (P-117) 19.04.2002 (P-118) 22.05.2002 (P-119) 16.07.2002 (P-117) 04.05.2002 (P-118) 06.11.2002 (P-119) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of installation of machinery and not the date of acquisition. In support of this contention, he has relied on various judicial pronouncements including the decision of Hon ble Gujarat High Court in the case of Pr. CIT vs IDMC Ltd. (supra). In the case of IDMC Ltd. (supra), additional depreciation u/s 32(1)(iia) was claimed by the assessee for AY 2006-07 in respect of plant machinery which was purchased on 12.02.2004 but installed on 15.04.2005. The AO denied the said claim of the assessee on the ground that the plant machinery having not been purchased in the relevant year i.e. AY 2006-07, twin conditions of acquisition and installation had not been satisfied. This interpretation given by the AO was not found acceptable by the Hon ble Gujarat High Court by holding that it would lead to an absurd and unjust result and the purpose of object of granting the additional depreciation would be frustrated. It was held by their lordship that section 32(1)(iia) is required to be interpreted reasonably and purposively as strict and literal reading of section 32(1)(iia) would lead to an absurd result denying the additional depreciation to the assessee though admittedly assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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