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Whether it is open to the assessee to claim depreciation for the current year and not claim unabsorbed depreciation of the previous years. Whether it is unabsorbed investment allowance which is to be allowed as set off in computing the income of the assessee or unabsorbed depreciation.
CIT Vs. S. Vijaya Kumar (Andhra Pradesh High Court) Individual items of centering and shuttering material used collectively in construction process constitute ‘Plant’ in terms of first proviso to section 32 (1), even if they can’t be used on stand alone basis.
In view of the categorical finding of the Hon’ble Suprreme Court that the goodwill also falls under the expression ‘any other business or commercial right of a similar nature’and thus would be an asset under Explanation 3(b) to section 32(1) of the Act, we accordingly hold that the assessee is entitled to the claim of depreciation on goodwill.
The assessee was not satisfied as the assessing officer did not allow the depreciation which was subsequently claimed during the course of assessment proceedings. The assessee in Cross Objection has challenged the order of the learned CIT (Appeals) in upholding the disallowance of claim of Rs.2, 57, 90,420/- made by the trust in respect of excess utilization made in the earlier years.
Issue No.1:- Weather year of acquisition and year of installation should be same or different for claiming Additional Depreciation? Issue No.2:- If Acquisition And Installation Done In Year 1 and put to use in year 2, then Additional Depreciation will be allowed in year 1 or in year 2 or it will lapse?
The Second issue relates to additional depreciation of Rs. 4,98,859/-. Assessing officer has disallowed the balance additional depreciation claimed by assessee on the machinery installed in the second half of the previous year relevant to the A.Y. 2007-08.
With a view to give a boost to the manufacturing sector, an additional depreciation shall be allowed to an industrial undertaking, subject to the provision given below. Such additional depreciation shall be in addition to the normal depreciation which is being allowed to all assessee.
There is no restriction on allowing balance of one time incentive in the subsequent year if the provisions are constructed reasonably, liberally and purposive. One has to notice that additional benefit was intended to give impetus to industrialisation and in that direction the assessee deserves to get the benefit in full when there is no restriction in the statute to deny the benefit of balance 50% when the new plant and machinery was acquired and put to use for less than 180 days in the immediately preceding year.
Himachal Pradesh High Court in the case of CIT vs. M/s Shree Triveni Foods held that the claim of depreciation for assessment years under dispute was not mandatory and therefore, the assessee could not be compelled to exercise the option as an obligation.
A reading of the agreement between STL and the assessee clarifies that a specific amount, i.e., Rs.9 Crores was paid by the assessee to the transferor who owned commercial rights towards the network and the facilities. The consideration was a specific value but for which the network would not have been otherwise transferred. In that sense, it constituted business or commercial rights which were similar to the enumerated intangible assets.
