Efacec Switchgear India P. Ltd. Vs ACIT (ITAT Delhi)
Assessee submitted that since tools, dies, jigs etc. are used by the appellant for its business of manufacturing switchgear products, the same are plant & machinery. Without these equipments it is not possible for appellant to manufacture switchgear products. Hence, the same are in the nature of ‘Plant & Machinery. It was submitted that in the assessment order also tools, dies, jigs etc. have been treated as Plant & Machinery and 15% depreciation on the same has been allowed. However, the same have not been treated as Plant & Machinery only for the purpose of additional depreciation. Therefore, the stand taken in the assessment order is contradictory in itself, in-as-much-as, as on the one hand the new plant & machinery and tools, dies, jigs etc. have been considered as ‘Plant & Machinery’ and normal depreciation @ 15% has been allowed on the other hand the same have not been considered as eligible for additional depreciation.
The bench is of considered opinion that since tools, dies, jigs etc. are used by the appellant for its business of manufacturing switchgear products it is evident that moulds, dies and tools are not independent of the plant and machinery, but are parts of the machinery. Once they are worn out, the machines cannot turn out the product to the business specifications and this has to be obtained only on a replacement of the tools or the dies and moulds.
Further also, in asessee’s own case in the subsequent years, the revenue has allowed the claim of additional depreciation on these tools etc. and thus the ground raised in the appeal is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal has been filed by the assessee against order dated 31.05.2018 in appeal no. 119/16-17 passed by the Commissioner of Income Tax (Appeals)-34, New Delhi (hereinafter referred to as the Ld. First Appellate Authority or in short Ld. FAA) in appeal before it against order dated 29.02.2016 passed u/s 143(3) of the Income Tax Act (hereinafter referred to as ‘the Act’) by ACIT, Circle 8(1), New Delhi (hereinafter referred to as the ld. Assessing officer or in short ‘Ld. AO’).
2. The assessee has raised following ground of appeal :-
“The learned CIT(A) erred on facts and in law in disallowing expenses on account of additional depreciation of Rs. 6,11,277.”
3. The facts in brief are that during the relevant AY appellant has claimed additional depreciation of Rs. 6,11,277/- on addition of new plant and machinery of Rs. 61,12,773/- as under :-
