ITAT Upholds CIT(A)’s Order Allowing 50% Depreciation on CNC Lathe Used Prior to Detection of Defect [Read Order]
The assessee’s counsel submitted that the CIT(A) had allowed the 50% depreciation after considering that the CNC Lathe machine had been put to use after September 2016.
![ITAT Upholds CIT(A)’s Order Allowing 50% Depreciation on CNC Lathe Used Prior to Detection of Defect [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/CNC-Lathe.jpg "ITAT Upholds CIT(A)’s Order Allowing 50% Depreciation on CNC Lathe Used Prior to Detection of Defect [Read Order]")
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s Order Allowing 50% Depreciation on CNC Lathe Used Prior to Detection of Defect. In this case, the Revenue has appealed against the order of the CIT(A) for the Assessment Year (AY) 2017-18. Coming to the facts of the case, the assessee, Clartech Engineers...
The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) upheld the Commissioner of Income Tax (Appeals) [CIT(A)]’s Order Allowing 50% Depreciation on CNC Lathe Used Prior to Detection of Defect.
In this case, the Revenue has appealed against the order of the CIT(A) for the Assessment Year (AY) 2017-18.
Coming to the facts of the case, the assessee, Clartech Engineers Pvt. Ltd., engaged in the business of manufacturing machinery and providing installation and maintenance services, filed its Income Tax Returns on 2-11-2017, declaring a total income of Rs. 54.26 lakhs, which was later revised to Rs. 46.67 lakhs on 9-2-2018.
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During the scrutiny proceedings, the assessing officer (AO) assessed the total income at Rs. 3.57 crores, making various additions, including the disallowance of depreciation on CNC Lathe and the addition of alleged bogus creditors.
The assessee, who was aggrieved by the order of AO, appealed before the CIT(A) for relief, and the latter partly allowed the appeal of the assessee by restricting the depreciation on CNC Lathe to Rs 1,28,975 and deleted the addition of Rs 1,82,75,037 on account of bogus creditors.
One of the grounds raised by the revenue in the appeal was whether the CIT(A) was justified in deleting the disallowance of depreciation on "CNC Lathe" of Rs. 1,28,975.
Before the ITAT, the departmental representative simply reiterated the AO's findings on depreciation for the CNC Lathe machine, without providing new arguments or evidence to justify the disallowance.
The assessee’s counsel submitted that the CIT(A) had allowed the 50% depreciation after considering that the CNC Lathe machine had been put to use after September 2016.
The ITAT upheld the CIT(A)’s findings that the machine was installed and initially used before defects were found and later replaced at no extra cost, confirming it was put to use, as it was used after September 2016, depreciation was rightly limited to 50% as per the Income Tax Act.
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The ITAT, comprising Siddhartha Nautiyal (Judicial Member) and Marakand V. Mahadeokar (Accountant Member), dismissed the revenue’s appeal.
To Read the full text of the Order CLICK HERE
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