Case Law Details
Sling Media Pvt. Ltd. Vs DCIT (ITAT Bangalore)
Payments forming part of CSR were claimed as deduction under section 80G. Held that assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing ‘Total Taxable Income”. If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature’.
Facts- The assessee filed its returns for the Assessment Year 2016-17 on 30.11.2016 declaring total income of Rs.8,45,29,290/-. The return was selected for scrutiny. AO noted that assessee claimed sum of Rs.24,47,283/- towards additional depreciation u/s. 32(1)(iia) of the Act, on additions made during the AY 2016-17 on block of assets like Computers and Software. After considering the submissions, the AO disallowed the claim on the premise that the computers were installed in the office premises, thus would disentitle claim for additional depreciation within the meaning of the Proviso 2B to section 32(1)(iia) of the Act.
AO further noted that the assessee had spent Rs.15,77,889 towards CSR activities in the nature of donations made to certain eligible institutions and claimed deduction of Rs.7,71,505 u/s. 80G of the Act. AO sought to disallow the deduction claimed u/s. 80G of the Act. Being aggrieved by the additions made by AO, assessee filed appeal before CIT(A). CIT(A) dismissed the grounds of appeal and upheld the additions. Aggrieved by the order of CIT(A), assessee is in appeal before us now.
Conclusion- The assets eligible for additional depreciation must be plant or machinery. Also that such plant or machinery should not be installed in any office premises or residential accommodation. We note that the development activity carried on by the assessee cannot be considered to be a manufacturing activity. Accordingly, relying on the decision of Hon’ble Bombay High Court in case of CIT vs. IBM World Trade Corporation reported in (1981) 130 ITR 739, we do not find any infirmity in the disallowance of additional depreciation to assessee.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
