Case Law Details
The assessee company is engaged in the business of manufacture and sale of iron and steel. Assessee installed certain new plant and machinery after September, 2007. For the previous year relevant to A.Y. 2008-09 the plant and machinery having been put to operation for less than 180 days the company claimed only 50% of the rate of additional depreciation and the balance 50% was claimed in the previous year relevant to A.Y. 2009-10, which is the year under consideration.
The AO as well as the CIT(A) were of the opinion that the assessee is not entitled to claim balance 50% depreciation in the subsequent year under section 32(1)(iia) of the Act. The case of the assessee was that it is a one time incentive allowed to the assessee under the Act where the object was to encourage establishment of industries and hence balance 50% is allowable in the year under consideration. The learned CIT(A) observed that as per proviso to section 32(1)(iia) additional depreciation equal to 20% of the cost of plant and machinery has to be allowed as deduction. Proviso to section 32(1)(iia) restricts such disallowance of depreciation to half in case the machinery was put to use for less than 180 days in the previous year. Therefore, the assessee cannot claim the balance 50% depreciation in the year under consideration.
Further aggrieved, assessee is in appeal before us. The learned counsel for the assessee placed reliance upon the following decisions of the ITAT Delhi Bench in support of his contention that there is no embargo in claiming deduction in the second year so long as complete depreciation was not allowed in the first year: –
i. DCIT vs. Cosmo Films Ltd. 139 ITD 628 (Del)
ii. ACIT vs. Sil Investment Ltd. 54 SOT 54 (Del)
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