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TMI Blog2019 (11) TMI 1387X X X X Extracts X X X X X X X X Extracts X X X X ..... er grievance in later assessment year 2009-10 seeks to revise Assessing Officer's action declining assessee's additional depreciation claim(s) of Rs. 10,37,81,969/- and 58,89,93,448/- respectively. The CIT(A)'s identical detailed discussion to this effect reads as under: "10. Decision: 1. The findings of the Ld. AO, the written submission and case laws / judicial precedents cited by the Ld. ARs have been duly considered. The Ld. AO disallowed the claim of the appellant holding that the assets on which additional depreciation is claimed by the assessee was neither new nor brought into existence in the year under consideration. 2. However, the Ld. ARs for the appellant submitted that the Act nowhere specifies the period in which such claim of additional depreciation shall be allowed. The Hon'ble Legislature do not intend to restrict the time limit of providing benefit of the claim and hence no restriction in this regard has been imposed, In absence of such specific provision, the benefit shall be available in subsequent years also. Further, the Ld, ARs stated that additional depreciation is allowed only on 'new assets' and the eligibility criteria of 'new ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee availed of additional depreciation @ 20% on the original cost of the machinery at Rs. 5,95,494/- and Rs. 48,26,123/- respectively in AY 2006-07. In AY 2007-08 also the assessee claimed additional depreciation at 20% of the original cost viz., Rs. 5,95,494/- and Rs. 48,26,123/- respectively in all depreciation totalling Rs. 54,21,617/-. 26. According to the AO, the deduction u/s.32(1)(iia) of the Act is granted only to "new" plant and machinery and once depreciation is granted in the 1st year in which the machinery is installed or put to use, the machinery ceases to be a new machinery and therefore additional depreciation cannot be allowed. The plea of the Assessee however was that Section 32(1)(iia)of the Act merely provides that further to the normal depreciation at the prescribed rates, an additional depreciation shall be allowed to the assessee at the rate of 20o/o on new plant and machinery acquired and installed after 31.03.2005. However, the period the period during which such additional depreciation shall be allowed is not specified in the Act. Thus, one may conclude that the allowance of additional depreciation shall not only be restricted to the initial year but cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the 3lst day of March, 1980 but before the 1st day of April, 1985, a further sum equal to one-half of the amount admissible under clause (ii) {exclusive of extra allowance for double or multiple shift working of the machinery or plant and the extra allowance in respect of machinery and plant installed in any premises used as a hotel) in respect of previous year in which such machinery or plant is installed or, if the machinery or plant is first put to use in the immediately succeeding previous year, then in respect of that previous year." Sec. 32(1)(iia) of the Act as reinserted by finance (No.2) Act, 2002, w.e.f. 1.4.2003 reads thus: "(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, 2002 by an assessee engaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii): Provided that such further deduction of fifteen per cent shall be allowed to-- (A) a new industrial undertaking during any previous year in which such undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant statutory provisions. 30. The CIT(A) after considering the aforesaid scheme and history of the provisions of Sec.32(1)(iia) of the Act, deleted the addition made by AO observing as follows :- "I have considered the submissions of the Ld, A/R and find substance in the contention of the Appellant, On a conjoint reading of the provisions of section 32(1)(iia) inserted by Finance (No. 2) Act, 1980 and reinserted by Finance Act. 2002 it is evident that the said sections specifically restricted the allowability of additional depreciation in the year of installation of P&M. However, in the section 32( 1 )(iia) amended vide Finance Act. 2005 Legislature had omitted the proviso wherein it was provided that such depreciation could be claimed only in the initial assessment year. This being a specific omission it could be construed that the intent of the Legislature was not to restrict the allowance of additional depreciation to the year in which the assets are installed but also in the second and subsequent years provided that the aggregate depreciation does not exceed the cost of the asset. It is settled law that a fiscal statute has to be interpreted the basis of the language used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d w.e.f. 01-04-06 wherein the condition of claiming additional depreciation only in the initial AY was deleted. It was submitted that since the specific condition for claim of additional depreciation in one year has been done away with, it should be construed as the intention of the legislature to allow additional depreciation in subsequent years as well. Reliance was placed on the following decisions wherein it has been held that a fiscal statute shall have to be interpreted on the basis of the language used therein and not de hors the same. Even if there is a casus omissus, the defect can be remedied only by legislation and not by judicial interpretation : - Orissa State Warehousino Corporation -vs,- CIT (1999) 237 ITR 589 (SC) - Prakash Nath Khanna and Another -vs.- CIT (2004) 266 ITR 1 (SC) - Smt. Tarulata Shyam & Othrs -vs.- CIT (1977) 108 ITR 345 (SC) - Padmasundara Rao vs. Slate of Tamil Nadu: 255 ITR 147 (SC) Apart from the above, it was also pointed out that DTC Bill 2013 has proposed expressly that additional depreciation would be allowed in the FY in which the P&M is used for the first time and those provisions are not made with retrospective eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the decision of Hon'ble Kolkata Tribunal and Hon'ble Mumbai Tribunal, the appellant's claim is allowed and Ld. AO is directed to delete disallowance amounting to Rs. 10,37,81,969/-." 4. Learned CIT-DR vehemently contends during the course of hearing that the CIT(A) has erred in law and on facts in accepting the assessee's additional depreciation claim. His case as per the Assessing Officer's discussion in page 3 of the assessment order dated 28.03.2013 is that the impugned additional depreciation relief is available only in respect of the new plant and machinery acquired and installed after 31.03.2005 whereas the assessee's assets in question are neither new nor they came into existence in the year under consideration. It terms the CIT(A) detailed discussion to be a totally non-speaking order since going by the tribunal's decision (supra) than dealing with relevant facts of the issue. Mr. Srihari further quotes the tribunal's yet another decision in [2017] 82 taxmann.com 238 (Chennai-Trib) Brakes India Ltd. vs. ACIT as under: "15. We have considered the rival submissions. A perusal of the provisions of section 32 as applicable for the relevant assessment year clearly sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.04.02. We find no merit in Revenue's instant grievance since various judicial precedents (2016) 157 ITD 132(Ahd), Tega Industries Ltd. vs. DCIT (ITA 1912/Kol/2012 dated 21.09.16) & Bharti Airtel Ltd. vs. Addl. CIT (2014 64 SOT 50 (URO) take note of the foregoing legislative amendment to hold that a corporate guarantee is not an international transaction u/s 92B of the Act. We decline the Revenue's instant grievance and main appeal ITA No.474/KOl/2018 therefore. 7. Next comes assessee's former Cross-Objection CO.64/Kol/2018 pertaining to the twin assessment years. Its former C.O No.64/Kol/2018 is not pressed during the course of hearing since we upheld the CIT(A)'s findings under challenge we therefore decline the same as rendered infractuous. The assessee's latter C.O No.66/Kol/2018 raises former issue of provision for leave encashment disallowance of Rs. 1,40,24,677/- u/s 43B(f) of the Act. Both the learned lower authorities have treated the same as a contingent liability being a mere provision only. It transpires during the course of hearing the hon'ble jurisdictional high court's decision in the case of Exide Industries Ltd. vs. UOI [2007] 292 ITR 470 (Cal) had quashed the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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