Case Law Details
DCIT Vs Tirupati Sugars (ITAT Kolkata)
The Income Tax Appellate Tribunal (ITAT) in Kolkata recently ruled on a significant tax appeal related to ‘additional depreciation on plant & machinery in captive power plants,’ specifically under Section 32(1)(iia) of the Income Tax Act. The case was filed by the Revenue against Tirupati Sugars for the assessment year 2012-13, examining whether additional depreciation claims made by the company were valid. The ruling opens up new interpretations for what can be considered as ‘new machinery’ and ‘manufacturing activity’ for the purpose of additional depreciation.
Background of the Case
Tirupati Sugars, a company engaged in sugar manufacturing, had declared a loss in the assessment year 2012-13. The company claimed additional depreciation under Section 32(1)(iia) for the purchase of a turbine used in a captive power plant and other machinery used for modifications in their existing plant. The Revenue raised multiple grounds of appeal challenging the Commissioner of Income Tax (Appeals)’ decision favoring the assessee.
Core Issues Addressed
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