Karnataka H.C : Additional depreciation allowed u/s. 32(1) (iia) is a onetime benefit to encourage industrialization and the relevant provisions has been construed reasonably and purposive without appreciating that the additional depreciation is allowed in the year of purchase and if in the year of purchase the assessee is eligible only for 50% depreciation, the balance 50% cannot be carried forward for the subsequent year or the claim cannot be allowed in any other year where the section 32(1) (iia) does not speak of any further depreciation except in the year of purchase

High Court Of Karnataka

CIT & Anr. vs. Rittal India (P) Ltd.

Section 32(1)(iia), 260A

Asst. Year 2010-11

N.K.Patil & S. Sujatha, JJ

I.T.A.NO. 590 OF 2015

4th January, 2016

Counsel appeared:

K.V. Aravind, Adv, for the Appellant. N.K.PATIL, J.:

1. This appeal by the Revenue is arising out cl the impugned order dated 11/06/2015, passed in ITA No. 109/Bang/2015, by the Income Tax Appellate Tribunal, Bangalore Bench-A, Bangalore, for considering the following substantial question of law:

(i) Whether the Tribunal was correct in holding that additional depreciation allowed u/s. 32(1) (iia) is a onetime benefit to encourage industrialization and the relevant provisions has been construed reasonably and purposive without appreciating that the additional depreciation is allowed in the year of purchase and if in the year of purchase the assessee is eligible only for 50% depreciation, the balance 50% cannot be carried forward for the subsequent year or the claim cannot be allowed in any other year where the section 32(1) (iia) does not speak of any further depreciation except in the year of purchase?

2. Assessee is a Private Limited Company being a member of the Rittal Group of Germany. It is engaged in the manufacture and sale of enclosures, heat exchangers and other electrical appliances. The return of income was filed for the assessment year 2010-11 declaring the total income of Rs.4,26,76,850/-. In the draft assessment order under Section 143(3) read with Section 144C dated 14.3.2014, the Assessing Officer has determined the total income at Rs.7,84,12,208/-as there was a disallowance under Section 32 (1) (iia) of Rs.3,53,65,893/being additional depreciation and an additional depreciation and an addition of Rs.3,69,463/due to transfer pricing adjustments. The Assessing Officer disallowed the same since the additional depreciation under Section 32(1)(iia) was allowable only in the first year of purchase.

The dispute Resolution Panel held that the claim of additional depreciation on assets installed during the period 1.10.2008 was allowable and directed allowance of additional depreciation claimed by the assessee under Section 32(1) (iia) of the Act. The Tribunal allowed the claim based on its own decision in assessee’s own case for assessment year 2008-09. the Tribunal also reiied on the decision of the coordinate benches of the Tribunal in the case of M/s. Cosmo Films Ltd wherein, it is held that the additional depreciation allowed under section 31(l)(iia) is a one time benefit to encourage industrialization and the relevant provisions has been construed reasonably and purposive. Being aggrieved by the order passed by the Tribunal, the appellants herein have presented this appeal

We have heard the learned counsel for the appellants.

During the course of submission, learned counsel appearing for appellants submitted, that the subject matter involved in this case is directly covered by the judgment passed by the Division Bench of this Court dated 24th November 2015 in ITA No.268/2014 (The Commissioner of Income Tax and another Vs. M/s. Rittal India Pvt. Ltd.). Therefore, he submitted that following the said judgment and for the reasons stated therein, this appeal may also be disposed of.

The above submission made by learned counsel appearing for appellants is placed on record.

Following the judgment of the Division Bench of this Court dated 24th November 2015 in ITA No. 268/2014 (The Commissioner of Income Tax and another Vs. M/s. Rittal India Pvt. Ltd.) and for the reasons stated therein, we do not find that any interference is called for in the order of the Tribunal or that any question of law arises in this appeal for consideration by this Court. Accordingly, the appeal filed by the appellant is dismissed.

[Citation : 380 ITR 428]

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