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TMI Blog2022 (7) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... UN/2017 - - - Dated:- 30-6-2022 - Shri S. S. Godara, Judicial Member And Shri Dr. Dipak P. Ripote, Accountant Member For the Assessee : Shri B. B. Mane For the Revenue : Shri Arvind Desai ORDER PER S. S. GODARA, JM: This assessee s appeal for assessment year 2012-13 arises against the CIT(A)- 1, Pune s order dated 30.03.2017 passed in case no. ITBA/APL/S/250/2016-17/1003769270(1) involving proceedings u/s 143(3) of the Income Tax Act, 1961; in short the Act . Heard both the parties. Case files perused. 2. The assessee s sole substantive grievance raised in the instant appeal challenges correctness of both the lower authorities action disallowing its additional depreciation claim of Rs.1,05,23,548/- u/s 32(1)(iia) of the Act. The CIT(A) s detailed discussion affirming the Assessing Officer s action to this effect reads as under :- 7. In ground No. 2 the appellant is aggrieved on account of action of the AO in not allowing additional depreciation u/s 32(1)(iia) of the I.T. Act, 1961. This issue has been discussed in Para 7 of the assessment order. To put it briefly, the AO during the course of assessment proceedings noticed that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... citing various decisions, the AO concluded that in order to be eligible for deduction u/s 32((1)(iia) of the I.T. Act. 1961. the appellant must be engaged in the business of manufacture of article or thing. The AO noticed that since the appellant was engaged in the business of design drawing and execution of air conditioning contract in India or abroad and also undertook repair and maintenance of air conditioning system and installation along with purchase and sale of spare parts and air conditioning equipments, the appellant was not eligible for claiming deduction u/s 32(1)(iia) of the I.T. Act, 1961 on account of additional depreciation. Accordingly, he disallowed the claim of Rs.1,05,23,548/- and added back to the total income of the appellant. 8. During the course of appellate proceedings, the appellant has filed following submissions: Ground No.2 1) We are engaged in the following Activities:- a) Design, Drawings Execution of air-conditioning contract in India b) Design, Drawings Execution of air-conditioning contract Abroad c) We purchase spare parts of the air-conditioning equipments, assemble them and export the airconditioning equipments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Air Control India Pvt. Ltd. Is having specialized business activities of providing Air Condition Refrigeration Plant and Machinery for Marine vessels (different types of ships) and Offshore Oil Gas installations such as oil drilling rigs, Gas Oil production platforms etc. Shipbuilding project is composite activity of installing many different types of Machineries Plants required for functioning of Marine Vessel such as main engine, generators, AC REF plants, pumps, navigation equipments, cranes, life boats and other required instrumentation. Normally the shipbuilding activity starts from Naval Architect designing the vessel (ship) as p the owner s requirements and accordingly the capacity of various equipments, machinery at plants are decided. The shipbuilding main and prime activity is to fabricate the ship structure and make the outer steel body of the ship and simultaneously various equipments and machineries are installed inside the ship structure as the ship body fabrication progress. For our Air conditioning plant also, we need to install our machinery progressively as the shipbuilding activities moves. We first bring basic equipments such as compress ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y.2012-13 the appellant will not be entitled for deduction of additional depreciation in respect of wind mill as legislature has brought the same in the ambit of section 32(1)(iia) from A.Y. 2013-14 onwards. The appellant has relied upon the decision of Hon. Lucknow Bench of ITAT in the case of J.K. Cement. In that case the facts were slightly different and the claim was made in respect of two captive power plants installed by the assessee which was used in the manufacturing of cement by the assessee company. In that case the issue under consideration was whether power generated by captive power plant amounts to manufacturing or production of any article or thing or not. In this case, the issue is whether the activity in respect of installation of A.C. in the ship amounts to manufacture or production or any article or thing or not. In any case, in absence of clear provision regarding admissibility of additional depreciation in respect of power generation units prior to A.Y. 2013-14 in the Act, I do not find any infirmity in the order of the AO and disallowance of Rs.1,05,23,548/- under section 32(1)(iia) of the I.T. Act, 1961 is upheld and the ground is dismissed. 3. Both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inguishable on facts . 3. We have heard rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that assessee is engaged in the business of trading in cotton bales and generation of power. During the course of assessment proceedings, AO noted that the assessee has claimed deduction u/s. 32(1)(iia) of the Act being additional depreciation on the wind mills, which were installed and commissioned during the year under consideration. According to AO, assessee is not eligible for additional depreciation for the reason that the assessee is not engaged in manufacturing/production of any article and moreover he is engaged in generation of power through wind mill and as per amendment brought into by the Finance Act, 2012 with effect from 01-04-2013 for the relevant AY 2013-14 which is retrospective. Aggrieved, assessee preferred an appeal before the CIT(A). 4. The CIT(A) allowed the claim of assessee by stating that this Plant Machinery was installed in AY. 2010-11 i.e., wind mill having capacity of 1,800 KV and this was commissioned and put to use on or before 31-03-2011 at S.F. No. 348/P1, Vandhiya, Bhachau, Kutch, Gujarat. Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icity generated by an assessee is an article or goods. The explanation to amendments (memorandum) as inserted by Finance Act, 2012 as relied upon by CIT(A) cannot be said to overrule and earlier decision of Hon ble High Court. An amendment that has prospective application cannot be said to retrospectively take away the rights of an assessee qua it s explanatory notes. Where there is no ambiguity in the Section, there is no warrant for resort to external aids of interpretation namely the notes on clauses and the memorandum explaining its provisions. In the light of decision of VTM Ltd.(supra) with regard to claim of additional depreciation u/s.32(1)(iia) for setting up a windmill, wherein material being sole decision by Hon ble High Court on the matter, we hold that additional depreciation should be allowed . 5.1 As the issue is squarely covered by the Tribunal s decision in assessee s own case for immediately preceding assessment year, additional depreciation has rightly been allowed by the CIT(A). Similar are the facts in the case of Shri Atul Shivdas Ganatra (HUF) in ITA No. 7250/Mum/2016. Accordingly, we dismiss both the appeals of Revenue. 5. Learned departmental repr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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