Income Tax Appellate Tribunal - Mumbai
Dcit 14(3)(2), Mumbai vs Supreme Nonwoven Industries P.Ltd, ... on 27 September, 2017
आयकर अपीलीय अिधकरण मुब ं ई "ई" खंडपीठ IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI सव ी राजे , लेखा सद य एवं संदीप गोसांई , याियक सद य Before S/Shri Rajendra, A.M. and Sandeep Gosain,J.M. आयकर अपील सं./ITA ./ ./ No.4883/Mum/2015, िनधा रण वष वष /Assessment Year: 2008-09 DCIT 14(3)(3) M/s. Supreme Nonwoven Industries Pvt. 455, 4th Floor, Aayakar Bhavan Ltd., 7th floor, Centre Point, 18th Road-
Vs. Mumbai-400 020. Chembur, Mumbai-400 071.
PAN: AAACB 1673 P
(अपीलाथ /Appellant) ( यथ / Respondent)
C.O. No.241/Mum/17
आयकर अपील सं./ITA No.4883/Mum/2015,
(Arising out of / िनधा रण वष /Assessment Year: 2008-09 )
M/s. Supreme Nonwoven Industries Pvt. DCIT 14(3)(3)
Mumbai-400 071. Vs. Mumbai-400 020.
(अपीलाथ /Appellant) ( यथ / Respondent)
Revenue by: Shri V. Justin-DR
Assessee by: S/Shri Akram Khan & Gopal Sharma
सुनवाई क तारीख / Date of Hearing: 25/09/2017
घोषणा क तारीख / Date of Pronouncement: 27.09.2017
आयकर अिधिनयम,
अिधिनयम , 1961 क धारा 254(1)केके अ तग त आदे श
Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद य, सद य,राजे के अनुसार /Per Rajendra,AM:
Challenging the order dated 11/06/2015 of CIT(A)-22, Mumbai the Assessing Officer (AO) has filed the present appeal.The assessee has filed cross objection.Assessee-company, engaged in the business of manufacturing of automobiles parts and filter fabrics,filed it return of income on 27/09/2008,declaring income of Rs.(-)2.48 crores.The AO,completed the assessment u/s.143(3)of the Act,on 14.12.2020,determing its income at Rs.(-)1.89 crores.
2.The solitary Ground of appeal,filed by the AO,is about allowing claim of additional depreciation of Rs.57.18 lakhs u/s. 32(1)(iia) of the Act.During the assessment proceedings, the AO observed that the assessee had acquired assets in the second half of previous assess - ment year(AY.),that it had claimed additional depreciation @10% in that year, that it had also claimed additional depreciation @10% for the year under consideration, that it was claimed that it was entitled to claim remaining depreciation (10%) in the instant AY.Initially, the AO allowed the claim made by the assessee.However,he issued a notice u/s.154 of the Act,on 13/9/2012,proposing rectification in the order.He was of the opinion that additional depreciation @ 20% of actual cost was allowable,that the plant & machinery (P&M)was used for less than 180 days,that there was no provision for carry forward of additional depreciation 4883/M/15(08-09); C.O.241/M/17 Supreme Nonwoven Industries Pvt.Ltd.
to subsequent AY.s,that the additional depreciation of previous AY claimed during the current AY.was to be disallowed.Accordingly, he disallowed the additional depre -ciation amounting to Rs.57,18,371/- in his order dtd.19/2/2014.
3.Aggrieved by rectification order of AO,the assessee preferred an appeal before the First Appellate Authority (FAA) and made elaborate submission. It relied upon several case laws. The FAA after considering available material held that the Tribunal in the case of M/s. MITC Rolling Mills (P.) Ltd. (ITA/2789/Mum/2012) had decided the issue in favour of the assessee. He also referred to the cases of Cosmo Films Ltd.(139ITD628) and allowed appeal of the assessee.
4.Before us,the Departmental Representative (DR) supported the order of the AO and the FAA.The Authorised Representative (AR) relied upon the cases of Rittal India (P.)Ltd. (384 ITR 423); M/s. MITC Rolling Mills (P.) Ltd. (supra); Rashtriya Chemicals & Fertilizers Ltd. (ITA/5160/Mum/2014);Cosmo Films Ltd.(139 ITD 628)and Birla Corporation Ltd.(55 taxmann.com 33) 4.1.We find that in the case of Rittal India (P.)Ltd. (supra)the Tribunal has dealt with the identical issue and has decided it as under:
"7. Clause (iia) of Section 32(1) of the Act, as it now stands, was substituted by the Finance Act, 2005, applicable with effect from 01.04.2006. Prior to that, a proviso to the said Clause was there, which provided for the benefit to be given only to a new industrial undertaking, or only where a new industrial undertaking begins to manufacture or produce during any year previous to the relevant assessment.
8. The aforesaid two conditions, i.e., the undertaking acquiring new plant and machinery should be ,a new industrial undertaking, or that it should be claimed in one year, have been done away by substituting clause (iia) with effect from 01.04.2006. The grant of additional depreciation, under the aforesaid provision, is for the benefit of the assessee and with the purpose of encouraging industrialization, by either setting up a new industrial unit or by expanding the existing unit by purchase of new plant and machinery, and putting it to use for the purpose of business. The proviso to Clause (ii) of the said Section makes it clear that only 50% of the 20% would be allowable, if the new plant and machinery so acquired is put to use for less than 180 days in a financial year. However, it nowhere restricts that the balance 10% would not be allowed to be claimed by the assessee in the next assessment year.
9. The language used in Clause (iia) of the said Section clearly provides that "a further sum equal to 20% of the actual cost of such machinery or plant shall be allowed as deduction under Clause (ii)". The word "shall" used in the said Clause is very significant. The benefit which is to be granted is 20% additional depreciation. By virtue of the proviso referred to above, only 10% can be claimed in one year, if plant a machinery is put to use for less than 180 days in the said financial year. This would necessarily mean that the balance 10% additional deduction can be availed in the subsequent assessment year, otherwise the very purpose of insertion of Clause (iia) would be defeated because it provides for 20% deduction which shall be allowed.2
4883/M/15(08-09); C.O.241/M/17 Supreme Nonwoven Industries Pvt.Ltd.
10. It has been consistently held by this Court, as well as the Apex Court, that beneficial legislation, as the present case, should be given liberal interpretation so as to benefit the assessee. In this case, the intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefits which was restricted by the proviso to only half of the same being granted in one assessment year, if certain condition was not fulfilled. But, that, in our considered view, would not restrain the assessee from claiming the balance of the benefit in the subsequent assessment year. The Tribunal, in our view, has rightly held, that additional depreciation allowed under Section 32(1 )(iia) of the Act is a onetime benefit to encourage industrialization, and the provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting additional allowance. We are in full agreement with such observations made by the Tribunal.
11. In view of the aforesaid, we do not find that any interference is called for with the order of the Tribunal, or that any question of law arises in this appeal for determination by this Court."
Considering the above and following the judgment of Rittal India (P.) Ltd. of Karnataka High Court(supra),we hold that the order of the FAA does not suffer from any legal or factual infirmity.So,confirming the same,we decide the effective Ground of appeal against the AO.
CO No.241/Mum/2017:
5.In its CO,the assessee has supported the order of the FAA. While deciding the appeal filed by AO,we have upheld the order of the FAA so, in our opinion the CO of the assessee is now academic in nature,hence, it is not being adjudicated.
As a result, appeal filed by AO is dismissed and CO is treated as academic in nature.
फलतः िनधा रती अिधकारी ारा दािखल क गई अपील नामंजर
ू क जाती है और िनधा रती का !"या$ेप अकादिमक माना
जाता है ।
Order pronounced in the open court on 27th September, 2017. आदेश क घोषणा खुले यायालय म दनांक 27 िसतंबर, 2017 को क गई ।
Sd/- Sd/-
(संदीप गोसांई /Sandeep Gosain) (राजे / RAJENDRA)
याियक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबईMumbai; दनांक/Dated : 27.09.2017.
Jv.Sr.PS.
आदेश क !ितिलिप अ&ेिषत/Copy of the Order forwarded to :
1.Appellant /अपीलाथ 2. Respondent / यथ
3.The concerned CIT(A)/संब अपीलीय आयकर आयु , 4.The concerned CIT /संब आयकर आयु
5.DR " E " Bench, ITAT, Mumbai /िवभागीय ितिनिध, खंडपीठ,आ.अ. याया.मुंबई
6.Guard File/गाड फाईल स यािपत ित //True Copy// आदेशानुसार/ BY ORDER, Dy./Asst. Registrar उप/सहायक पंजीकार आयकर अपीलीय अिधकरण , मुंबई /ITAT, Mumbai.3