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TMI Blog2020 (1) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee s own case has taken the view that to claim additional depreciation, the assessee should be engaged in manufacturing activity and that it is not necessary that the assets on which additional depreciation is claimed should be used in the manufacturing activity. Therefore, we modify the directions contained in the impugned order of the CIT whereby he has directed the AO to examine the purpose for which the assets on which additional depreciation is claimed is used in the manufacturing activity as not the requirement of the law. With this modification of the impugned order, we partly allow the appeal of the assessee. - IT (TP) A No. 731/Bang/2016 - - - Dated:- 7-1-2020 - SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued a show cause notice dated 1.1.2016. 4. In reply of the show cause notice dated 1.1.2016, the assessee submitted that the depreciation claimed for the AY 2009-10 included additional depreciation Us 32(1)(iia) amounting ₹ 1,95,32,382/- on plant and machinery and ₹ 2,26,35,752/- on computers and software and also furnished a list of items of new assets on which additional depreciation was claimed by the Assessee. 5. On perusal of the list of new assets added during the year, the CIT was of the view that the new assets included many of the office equipments used for general purpose like UPS, TV, Blackberry, sofa - for ladies resting lounge, storage boxes, air conditioner, water treatment plant-rdc, electrical work-rdc et ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the claim of additional depreciation U/sec 32(1)(iia) was set aside by the CIT to the file of the Assessing Officer for due verification of the eligibility of the assets for claiming additional depreciation. 6. Aggrieved by the aforesaid order of the CIT, the assessee has filed the present appeal before the Tribunal. At the time of hearing, the learned Counsel for the assessee pointed out that pursuant to the impugned order, the AO has passed an order dated 29.8.206 u/s.143(3) of the Act read with Sec.263 of the Act, giving effect to the impugned order in which the AO allowed additional depreciation on computers including computer software and therefore the grievance projected by the Assessee in this appeal in Ground No.7 to 10 were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for allowing depreciation, is not correct and if to this effect if the impugned order is modified, then that would be sufficient relief to the Assessee. In this regard, the learned Counsel for the assessee submitted that such a condition is not the requirement for claim of additional depreciation. In this regard, the learned Counsel for the assessee drew our attention to the decision of the ITAT, Bangalore Bench, in assessee s own case for Assessment Year 2008-09 on an identical issue. The said decision has been reported in (2020) 115 taxmann.com 154 (Bangalore-Trib). The Tribunal examined the question whether for claiming additional depreciation, the asset in question should be used for manufacturing activity or is it enough if the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (ii): 19. A bare reading of the aforesaid provisions shows that the new machinery or plant should be used by an assessee engaged in the business of manufacture or production of any article or thing and the new machinery or plant need not be used in manufacture or production of any article or thing. The learned counsel has before us relied on the decision of the Hon ble Madras High Court High Court in the case of CIT Vs. VTM Ltd.319 ITR 336 (Madras) wherein the assessee-company was engaged in the business of manufacture of textile goods. During the relevant assessment year, it had set up a wind mill for generation of power and claimed additional depreciation thereon under section 32(1)( iia). The Assessing Officer disallowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT should be modified and in the set aside proceedings, the additional claim should not be disallowed on the ground that the assets in question were not used in the manufacturing activities carried on by the assessee and therefore the additional depreciation will not be allowed. Learned DR relied on the order of CIT. 9. We have carefully examined the rival submissions and we find that this Tribunal in assessee s own case has taken the view that to claim additional depreciation, the assessee should be engaged in manufacturing activity and that it is not necessary that the assets on which additional depreciation is claimed should be used in the manufacturing activity. Therefore, we modify the directions contained in the impugned orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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