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TMI Blog2016 (3) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... e 10% during the year under consideration. However, the Assessing Officer disallowed the claim of the assessee on the ground that there is no provision in the Incometax Act, 1961 for allowing the balance 10% of the additional depreciation during the year under consideration. The CIT(A) also confirmed the order of the Assessing Officer. The ld. Counsel placed his reliance on the decision of the Cochin Bench in the case of Apollo Tyres Ltd vs ACIT (2014) 64 SOT 203. 4. On the contrary, Shri Pathlavath Peerya, ld. Departmental Representative submitted that sec. 32(1)(iia) of the Act provides for additional depreciation @ 20%. This sec. does not provide for carry forward of the depreciation in the subsequent year, therefore, the CIT(A) has rightly confirmed the order of the Assessing Officer. 5. We have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the assessee has installed the machinery during the earlier assessment year and the machinery installed is entitled for additional depreciation. However, the Assessing Officer restricted additional depreciation @ 10% since the machinery was used by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1)(iia) clearly says that in case a new machinery or plant was acquired and installed after 31-03-2005 by an assessee, who is engaged in the business of manufacture or produce of article or thing, then, a sum equal to 20% of the actual cost of the machinery and plant shall be allowed as a deduction. It is not in dispute that the assessee has acquired and installed the machinery after 31-03- 2005. It is also not in dispute that the assessee is engaged in the manufacture of article or thing. Therefore, the assessee is eligible for additional depreciation which is equivalent to 20% of the actual cost of such machinery. The dispute is the year in which the depreciation has to be allowed. The assessee has already claimed 10% of the depreciation in the earlier assessment year since the machinery was used for less than 180 days and claiming the balance 10% in the year under consideration. Section 32(1)(iia) does not say that the year in which the additional depreciation has to be allowed. It simply says that the assessee is eligible for additional depreciation equal to 20% of the cost of the machinery provided the machinery or plant is acquired and installed after 3103-2005. Proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and in view of the decision of Hon'ble Supreme Court in the case of Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188, the provisions related to it have to be construed reasonably, liberally and purposive to make the provision meaningful while granting the additional allowance. This additional benefit is to give impetus to industrialization and the basic intention and purpose of these provisions can be reasonably and liberally held that the assessee deserves to get the benefit in full when there is no restriction in the statute to deny the benefit of balance of 50% when the new machinery and plant were acquired and used for less than 180 days. One time benefit extended to assessee has been earned in the year of acquisition of new machinery and plant. It has been calculated @15% but restricted to 50% only on account of usage of these plant & machinery in the year of acquisition. In section 32(1)(iia), the expression used I "shall be allowed". Thus, the assessee had earned the benefit as soon as he had purchased the new machinery and plant in full but it is restricted to 50% in that particular year on account of period usages. Such restrictions cannot divest the statutory right. Law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and the Assessing Officer is directed to allow the balance 10% additional depreciation. 6. The next ground of appeal is with regard to computation of capital gains. 7. Shri R.Vijayaraghavan, ld. Counsel for the assessee submitted that the Assessing Officer computed long term capital gains at Rs. 86,45,99,912/- on the basis of the joint venture agreement dated 7.9.2009. According to the ld. Counsel, as per the joint venture agreement and the power of attorney given by the assessee, it would be effective only after the approval of construction received from the concerned authorities. During the year under consideration, the necessary approvals were not received from the concerned authorities, therefore, there was no transfer of interest in the immovable property. Referring to the copy of the joint development agreement which is available at page 34 of the paper book, the ld. Counsel submitted that the joint development agreement cannot be construed as delivery of possession by the assessee to the developer in part performance of the contract as defined u/s 53A of Transfer of Property Act, 1982. In view of this specific agreement between the parties, according to the ld. Counsel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Godrej on 7.9.2009 which falls during the year under consideration. Clause (2) of the Agreement clearly says that the assessee agreed irrevocably to grant all rights, powers and authority to develop the property to the developer. A reference was also made that the permission granted to the developer shall not be construed as delivery of possession u/s 53A of the Transfer of Property Act. The agreement further says that the assessee is entitled for 30% of the constructed area. In lieu of 30% constructed area allotted to the assessee, the assessee has to transfer 70% of the undivided share in the land to the developer. This agreement is irrevocable. The physical possession of the property was handed over for carrying out the development activities. The assessee has also granted exclusive right to the developer to sell the property to various prospective purchasers. A bare reading of this agreement clearly shows that the assessee can get back 30% of the constructed area in lieu of 70% of the undivided share in the land given to the developer. Therefore, by way of an arrangement, the property was handed over to the developer for development. This kind of arrangement may not be 'tra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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