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TMI Blog2021 (7) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of this claim of assessee which is not negated by revenue. In view of this solitary ground raised by the assessee is allowed and the learned assessing officer is directed to grant claim of additional depreciation to the assessee which was restricted by the learned CIT - A. Accordingly ground number 1 - 3 of the appeal are allowed. Tax credit - HELD THAT:- As assessee is eligible for the tax credit of the income, which is been included in the return of income of the merged entities. Therefore, we direct the assessee to approach the assessing officer with the requisite claim, the AO is directed to verify the same and grant the credit in accordance with the law. Accordingly, the additional ground raised by the assessee is allowed with above direction. Deduction of education cess paid by the assessee on the total income - HELD THAT:- The issue of deduction of education cess as an allowable deduction is covered in favour of the assessee by the decision of the honourable Bombay High Court in Sesa Goa Ltd. [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] and therefore we direct the learned assessing officer to grant the deduction of the same. Claim of the dividend distribution t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ostic and report making would not happen. Accordingly, plants and machinery used at collection centers are eligible for additional depreciation u/s. 32(1)(iia) of the IT Act. 3. The Ld. CIT(A) has erred in law as well as on fact in disallowing the claim of additional depreciation on UPS, refrigerator, air conditioners, oxygen cylinder, microwave oven, trolley, cabinet, blood collection stands, filing cabinet, punching machine, token machine etc. without appreciating the facts that these items are integral part of the plants and machinery necessary for pathological and diagnostic purpose without which the diagnostic and report making would not be possible. The business of pathological and diagnostic testing having been held as industrial undertaking, the appellant would be entitled to additional depreciation on all such items. 3. During the course of hearing the assessee has filed an application for admission of additional grounds as under:- 1. On the facts and circumstances of the case and in law, the ld. Assessing Officer/CIT (A) ought to have allowed the TDS credit to the appellant company which was available in the hands of the entities that merged with the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee and disallowed the additional depreciation for the following reasons:- a. That the assessee has not invested in the industrial undertaking as it is engaged in the business of providing referral service and diagnostic services. b. The work done in pathological laboratory cannot be put at bar to an industrial undertaking as there is no product in the pathological examination of the material supplied. The ld. AO relied on the decision of Andhra Pradesh High Court in CIT Vs. Dr. Surender Reddy wherein, it has been held that the report given by conducting the test did not amount to production of an article or a thing. Thus, additional depreciation was disallowed. 7. The learned assessing officer further examined the issue of disallowance u/s. 14 a read with rule 8D of the act wherein it has been noted that the assessee has made assume to disallowance of ₹ 2,419,116. Therefore, it was examined and assessee was asked to the show cause why the provision of Rule 8D cannot be applied for working out the disallowance u/s. 14A of the Act. Thereafter, the ld. AO computed the disallowance u/s. 14A read with Rule 8D of ₹ 45,32,806/- and made a further balance disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself has allowed it for the earlier years it cannot be disallowed for this year. He relied on the Principles of consistency. He further relied upon the decision of the CIT Vs. VTM Ltd. 319 ITR 336, decision of ITAT Bangalore in Texas Instrument Pvt. Ltd. Vs. Additional CIT, ITA Nos. 144 and 169/Bang/2014, DCIT Vs. Bengal Beverages ITA No. 1218/Kol/2015 dated 06.10.2017, CIT Vs. Trinity Hotels 225 ITR 178 of Hon'ble Rajasthan High Court and decision of the coordinate bench in Bikanerwala Foods Vs. DCIT 6357/Del/2015. He submitted that the ld. CIT(A) has held that machinery installed at the collection center depreciation is not to be allowed however, he allowed additional depreciation with respect to the machinery installed in pathological laboratory, against which the revenue is not in appeal. Therefore, he submitted that the revenue has accepted that the assessee is entitled to the additional depreciation on the assets installed at pathological laboratories. He submitted that it is an interconnected operation of same business and cannot be bifurcated into machinery installed at collection center and machinery installed at pathological laboratories. It is a composite business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was restricted by the learned CIT - A. Accordingly ground number 1 - 3 of the appeal are allowed. 13. Coming to the first additional ground raised he submitted that the appellant company (earlier known as 'Pathnet India Private Limited') underwent a merger with four companies w.e.f. 01st April, 2006 pursuant to orders dated 19.12.2008 of Hon'ble Delhi Court, dated 09.01.2009 of Hon'ble Bombay High Court and dated 14.11.2008 of Hon'ble Madras High Court. However, in the subsequent years, the tax was deducted on the receipts of the merged entity (the appellant company) by the deductors, who filed their TDS returns with the PAN of the merging entities instead of the merged entity. Resultantly, the TDS deducted on the receipts of the appellant company was not reflecting in its Form 26AS, thus denying the appellant company its rightful claim of TDS for which corresponding income had been duly disclosed in the Return of Income for the years under consideration. Therefore, the appellant company is entitled to claim the tax deducted on its receipts, which erroneously lie in the hands of the merging entities and have been denied due to the fault of the deductors. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisite facts are already on record. Hence, we admit the same. 18. On the merits of the claim the learned authorized representative submitted that this issue is squarely covered in favour of the assessee by the decision of the honourable Bombay High Court in case of Sesa Goa Ltd. versus joint Commissioner of income tax 423 ITR 426 and the host of the other decisions. 19. The learned departmental representative submitted that education cess is a tax and therefore it cannot be granted as deduction to the assessee by the virtue of the provisions of Section 40 (a)(ii) of the act. 20. We find that assessee has raised the additional ground claiming deduction of education cess paid by the assessee on the total income as well as dividend distribution tax. On careful analysis, we find that the issue of deduction of education cess as an allowable deduction is covered in favour of the assessee by the decision of the honourable Bombay High Court in Sesa Goa Ltd. (supra) and therefore we direct the learned assessing officer to grant the deduction of the same. 21. With respect to the claim of the dividend distribution tax, we find that same is not an expenses incurred by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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