Depreciation of 15% allowable on Electrical Fittings installed at factory premises: ITAT [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that since the Assessing Officer (AO) himself has accepted the higher claim of 15% in Assessment Year 2014-15, thus allowed of claim of higher depreciation of 15 % on electrical fittings installed at factory premises.

The assessee in this case is Super Alloy Castings P. Ltd., during the assessment proceeding the AO disallowed claim of Rs.80,998 on account of Depreciation on Electrical Fittings.

Aggrieved by the order the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] , which upheld the decision of Assessing Officer (AO).

Further the assessee filed an appeal before the Tribunal. The Authorized Representative of the assessee  Rajnish Behari Mathur, submitted that the electric fittings are installed in the office premises as well as in the factory premises. The depreciation has been claimed @10% on the fittings installed in the office premises whereas the depreciation on Factory Genset and Electrical Panels of certain machine installed for factory premises are charged at 15% as eligible to the assessee.

He further stated that the AO as well as the CIT(A) has failed to appreciate the distinction between the electric fittings installed in the factory premises vis-à-vis office premises and allowed depreciation @10% only on the electric fittings installed on factory premises too.

It was further pointed out that for the Assessment Year 2014-15 on the same matter, the AO issued notice under Section 148 of the Income Tax Act on account of excess depreciation on such electric fittings. However, while framing the assessment under Section 143(3) r.w. Section 147 of the Income Tax Act, the AO found merit in the claim of the assessee and no additions were made on the identical point.

Anuj Garg appeared as Departmental Representative (DR).

The Bench comprising of Saktijit Dey, Vice President and Pradip Kumar Kedia, Accountant Member observed that in the plea of the assessee towards correctness of higher depreciation claimed on electric fittings installed at the factory premises. The AO himself has accepted the higher claim of 15% in Assessment Year 2014-15.

Therefore the order of the CIT (A) is set aside on this issue and the AO was directed to reverse the disallowance on this score. Hence, ground of the appeal of the assessee was allowed.

To Read the full text of the Order CLICK HERE

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