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TMI Blog2022 (4) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(iia) of the Act, as amended from time to time, are interpreted on the basis of language used therein which is plain, clear and unambiguous and applied accordingly. Having regard to the language used while making the amendment to the provisions of Section 32(1)(iia) by the Finance Act, 2016 which is plain, clear and unambiguous and keeping in view the legislative intention behind the said amendment as explained in the relevant memorandum to extend the benefit of additional depreciation in respect of the cost of new plant or machinery acquired and installed even by the assessees engaged only in the business of distribution of electricity/power from a certain date, i.e. 1st April 2017, we are of the view that the same cannot be treated as declaratory/curative in nature so as to give retrospective effect to it as sought to be contended by the learned Counsel for the assessee. The said amendment made effective by the legislature clearly from 1st April 2017; thus is applicable in relation to Assessment year 2017-18 and subsequent Assessment Years; and the same, therefore, cannot be applied to the year under consideration, i.e. AY 2015-16, to allow the assessee additional depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and aircraft), which has been acquired and installed after the 31st day of March, 2005, by an assesses engaged in the business of manufacture or production of any article or thing or in the business of generation or generation and distribution of power, a further sum equal to twenty per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause (ii). Since, the assessee company is engaged only in distribution of electricity and additional depreciation is allowable to companies engaged in business of either generation of power or 'generation and distribution' of power. So, the claim of additional depreciation allowed to assessee was not correct as assessee did not qualify to claim deduction for additional depreciation u/s 32(1)(iia) of the IT Act and accordingly, additional depreciation of ₹ 58,57,95,373/- allowed during assessment is required to be disallowed and added to the total income. 3. The learned PCIT accordingly issued notice under Section 263(1) of the Act to the assessee on 24.05.2019 pointing out the above error and seeking explanation of the assessee. In reply, the following explanation was offered on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the Legislature to provide the benefit only to these states and to deprive the other states from the benefits..... 4. The learned PCIT did not find the explanation offered by the assessee in the matter to be acceptable. He noted that the erstwhile Gujarat Electricity Board was split into seven different companies and the assessee-company was one of those seven companies which was engaged only in the distribution of electricity. He referred to the amendment made in Section 32(1)(iia) by the Finance Act, 2012 whereby the assessee engaged in the business of generation or generation and distribution of power was made eligible to claim additional depreciation. Relying on this amended position applicable to the year under consideration, i.e. AY 2015-16, the learned PCIT held that the assessee engaged only in the business of distribution of power was not entitled to claim additional depreciation and it became entitled to claim such additional depreciation subsequently with effect from 1st April 2017 as per the amendment made again by the Finance Act, 2016 in the provision of Section 32(1)(iia) of the Act. The learned PCIT noted that the said amendment by Finance Act, 2016 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith effect from 1st April 2017, keeping in view the legislative intention behind making the said amendment, it has to be treated as retrospective in nature. He invited our attention to the Memorandum explaining the legislative intention behind the said amendment to point out that the same was made in order to rationalize the incentive for power sector. He contended that the eligibility of claim cannot be decided merely on the basis of words used in the statute and the intention and motive underlining the amendment made in the provision should be considered while interpreting the amended provision. 7. Learned Counsel for the assessee contended that if the provisions of Section 32(1)(iia) of the Act, as amended from time to time, relating to additional depreciation are interpreted merely on the basis of words used therein, it will lead to a situation where the electricity companies of only few States will get benefit because of the organizational set up decided by them; whereas, the electricity companies of other States will be deprived of such benefits. Relying on the decision of Hon ble Supreme Court in the case of CIT vs. Vatika Township (P.) Ltd., [2014] 49 taxmann.com 249 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim additional depreciation as per the provisions of Section 32(1)(iia) of the Act as applicable to the year under consideration, i.e. AY 2015-16. He contended that, as per the relevant provisions of Section 32(1)(iia) applicable to the year under consideration, only the assessee engaged in the business of generation or generation and distribution of power was entitled for additional deprecation and this benefit was extended to the assessee engaged only in the business of distribution of power by Finance Act, 2016 only with effect from 1st April 2017. He contended that this amendment made by Finance Act, 2016 is not clarificatory in nature and, as rightly held by the learned PCIT, the same cannot be given retrospective effect. He contended that the relevant provisions of Section 32(1)(iia) as amended from time to time are very clear and there being no ambiguity whatsoever, nothing can be read into the same to give retrospective operation as sought by the learned Counsel for the assessee especially when it is made clear by the legislature that the amendment made by the 2016 Act is effective only from 1st April 2017. He also contended that there is no hardship involved in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant shall be allowed as deduction under clause (ii) .. 12. It is manifest from the provision of Section 32(1)(iia) as amended by the Finance Act, 2012 with effect from 1st April 2013 that additional depreciation was allowed in respect of cost of new plant or machinery acquired and installed by certain assessees engaged in the business of generation or generation and distribution of power and the assessees engaged only in the business of distribution of power/electricity, like the assessee in the present case, was not allowed the benefit given under Section 32(1)(iia) of the Act. As per the provision of Section 32(1)(iia), as amended by Finance Act, 2012 with effect from 1st April 2013 which is applicable to the year under consideration, i.e. AY 2015-16, the assessee-company engaged only in the business of distribution of electricity thus was not entitled to claim additional depreciation of 20% in respect of the cost of new plant or machinery acquired and installed by it and this position is not even disputed by the learned Counsel for the assessee at the time of hearing before us. He, however, has relied on the amendment again made in Section 32(1)(iia) by the Finance Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first proviso to Section 14B and the same being curative in nature, it was held by Hon ble Supreme Court that it would operational with effect from 01.04.1988. Moreover, it is not a case where the purpose of amendment made to provision of Section 32(1)(iia) by the by Finance Act, 2016 can be said to relieve the assessee from undue hardship so as to give retrospective effect to the said amendment as held by the Hon ble Madras High Court in the case of CIT Vs. Vummudi Amarendran (supra) cited by the learned Counsel for the assessee. 15. In the last case of CIT vs. Vatika Township Pvt Ltd (supra), relied upon by the learned Counsel for the assessee, it was held by the Hon ble Supreme Court that if the legislation is for the purpose of supplying an obvious omission in a former legislation or to explain a former legislation, the same can be given a retrospective effect. In the present case, the purpose of amendment made to the provisions of Section 32(1)(iia) by the Finance Act, 2016, as explained in the relevant memorandum, was to extend the benefit of additional depreciation in respect of the cost of new plant or machinery acquired and installed even by the assessees engaged on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture itself and the Court cannot read anything into a statutory provision which is plain and unambiguous. 17. As regards the contention of the learned Counsel for the assessee that if the provisions of Section 32(1)(iia) of the Act as amended from time to time are interpreted merely on the basis of words used therein, it will lead to a situation where the electricity companies of only few States will get benefit because of the organizational set up decided by them thereby causing hardship to the electricity companies of other States, we are unable to accept the same. In our opinion, the provisions of Section 32(1)(iia) of the Act, as amended from time to time, relating to the additional depreciation are applicable to the electricity companies across all the States on the basis of nature of business carried on by them and the benefit of the same thus is available uniformly to all the electricity companies irrespective of their States on the basis of the nature of their activities, notwithstanding the organizational set up decided by them. It, therefore, cannot be said that there is any hardship or discrimination causing to the electricity companies on the basis of their State if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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