The Mumbai bench of Income Tax Appellate Tribunal (ITAT) recently held that SI Group India is eligible for depreciation in respect of technical know-how and on embedded process technology.
Assessee SI Group India P. Ltd. is a company engaged in manufacturers of organic chemicals. It filed its return of income as per normal computation provisions of income and book profit u/s. 115JB of the Act was shown at nill.After the scrutiny assessment assessing officer wrongly allowed depreciation on assessee’s capital work-in-progress was destroyed in an accident in September 2000 .Accordingly notice under section 263 of Income Tax Act 1961 issued against assessee and order was passed against the assessing officer .Against the order assessee filed appeal before ITAT.
Naresh Kumarcounsel for the assessee contended that that assessing officer did not have power to deny depreciation on building, plant and machinery or technical know-how and commissioner of income tax also did not have the power to withdraw the claim.H.N. Singh counsel for the revenue confirmed the order of the Principal commissioner of income tax appeal (PCIT) .
After considering the contentions of the both parties the division bench of ITAT comprising Prashant Maharishi, (Accountant Member) and Pavan Kumar Gadale, (Judicial Member) allowed the appeal filed by the assessee and observed that assessee eligible for depreciation on the technical know-how because the damaged machinery was rebuilt and the same was capitalizing the books of accounts .
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