ITAT allows Additional Depreciation claimed for Windmill u/s 32(1)(iia) [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune Bench allowed the additional depreciation claimed for windmills u/s 32(1)(iia) of the Income Tax Act,1961.

The assessee wasrepresented by Shri B. B. Mane and the revenue was represented by Shri Arvind Desai.

The assessee, Air Control India Pvt. Ltd engaged in the manufacture of Air Conditioning Systems and ducting and other periphery of air conditioning systems. The appellant company had commissioned a windmilland the AO noticed that apart from normal depreciation in respect of the windmill as per the applicable rate of 80%, the appellant company had also claimed additional depreciation of Rs.1,05,23,548/- u/s 32(1)(iia) of the Income Tax  Act, 1961.

It was evident that the additional depreciation of 20% u/s 32(1)(iia) of the Income-tax Act, 1961 for machinery or plant acquired by a taxpayer who is engaged in the business of manufacture or production of article or thing or in the generation or generation and distribution of power amounting to Rs. 1,05,23,548/-. It was clear that the assessee has already been granted normal depreciation on the corresponding fixed asset.

The additional depreciation was claimed u/s. 32(1)(iia)  of the Actsame is applicable only with effect from 1.4.2013  for the reason that the assessee is engaged in manufacturing/production of any article or thing and this new Plant & Machinery was acquired before and installed before 3103-2010.

Shri S S Godara, judicial member and Shri Dr Dipak P Ripote, accountant member observed that an amendment that has prospective application cannot be said to retrospectively take away the rights of an assessee qua its explanatory notes.  While allowing the appeal the Tribunal held that where there was no ambiguity in the section, no need for external aids of interpretation namely the notes on clauses and the memorandum explaining its provisions.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.