In subsequent AY 50% depreciation u/s 32 1(iia) is allowed
Facts and Issues of the case
Assessee is a company stated to be engaged in the business of manufacturing anti-vibration auto parts. Assessee electronically filed its return of income for A.Y. 2014-15 on 29.11.2014 declaring income at Rs.59,44,61,550/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) r.w.s 144C of the Act and the total income was determined at Rs.59,91,92,361/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who dismissed the appeal of the assessee. Aggrieved by the order of CIT(A), assessee is now in appeal
During the course of assessment proceedings, AO on perusal of the Profit and Loss account noticed that assessee had claimed additional depreciation of Rs.47,30,811/- u/s 32(1)(iia) of the Act. Assessee was asked to show-cause as to why additional depreciation should not be disallowed.
Assessee inter alia submitted that the additional depreciation @10% was on the plant and machinery and mould purchased between 2nd Oct 2012 to 31st March 2013 in F.Y. 2013-14. It was further submitted that since in that year, the assessee had put the assets at less than 180 days from the date of acquisition of the assets, assessee had claimed additional depreciation @10% in 2013-14 and the balance 10% additional depreciation was claimed in A.Y. 2014-15.
The submissions of the assessee was not found acceptable to AO. AO was of the view that the provision of Section 32(iia) does not provide any allowance for claim of additional depreciation in the next year in which the additions have been made. He accordingly denied the claim of additional depreciation of Rs.47,30,811/-.
Observations by the Court
The Court has heard the rival submissions and perused the material available on record. The issue in the present ground is with respect to the claim of additional depreciation u/s 32(1)(iia) of the Act. It is an undisputed fact that the assessee had made additions to plant and machinery amounting to Rs.4,79,99,405/- for the assets purchased between 2nd Oct 2012 to 31st March 2013. In assessment year 2013-14, since the assets were utilized for less than 180 days period, it had claimed additional depreciation @10% as against the eligibility of additional depreciation being 20%. The balance 10% of the additional depreciation has been claimed by the assessee in the year under consideration. The lower authorities had disallowed the claim of additional depreciation only for the reasons that the assets on which the assessee has claimed additional depreciation were not installed / added during the year under consideration but were added in earlier financial year.
The Court thus direct the AO to allow the claim of additional depreciation thus allow the ground of assessee.
Appeal of the assesse that the CIT(A) was not justified in confirming the disallowance of additional depreciation u/s 32(1)(iia) of the Act amounting to Rs.47,30,811/- is allowed.Vibracoustic-India-Pvt.-Ltd-Vs-ACIT-ITAT-Delhi