Bombay HC: National Security Justifies Denial of Police Clearance Certificate  ||  Bombay HC: Comic Remarks Without Malicious Intent Not Religious Insult  ||  J&K&L High Court: Scandalous Allegations Against Judicial Officers in Pleadings Impermissible  ||  P&H HC: Writ Petition Against Private Trust's Contractual Employment Dismissed  ||  Gujarat HC: Customary Divorce Entitles Daughter to Family Pension  ||  Calcutta HC: ECI's Prerogative to Deploy Central Employees as Counting Supervisors Upheld  ||  Calling the Situation Grim, the Supreme Court Takes Suo Motu Cognizance of Delays in NCLT Approvals  ||  Supreme Court: Admission of a Claim by a Resolution Professional is Not Debt Acknowledgment  ||  Supreme Court: Public Figures Must Exercise Caution as Their Words Have Consequences in Society  ||  SC: State Must Act as a Model Employer, Criticising the Union For Not Regularising ISRO Workers    

DCIT, New Delhi vs. Haldiram Snacks Pvt. Ltd., New Delhi - (Income Tax Appellate Tribunal) (23 Aug 2022)

Additional depreciation of 20% of the cost of new plant and machinery acquired and installed is allowable under Section 32(1)(iia) of IT Act

MANU/ID/1355/2022

Direct Taxation

The assessee is a company engaged in the business of manufacturing of sweets, namkeens and running of restaurants. It filed its return on 30th November, 2015 for AY 2015-16 declaring income of Rs. 1,80,24,57,600. The case was selected for scrutiny. During assessment proceedings, the Learned Assessing Officer ("AO") found that the assessee has claimed depreciation of Rs. 1,46,75,508 @ 10% on account of plant & machinery installed during the previous AY. Since the assessee had purchased these assets after 1st October, 2013, it claimed 50% of normal depreciation and 50% on these assets in the immediate preceding AY. The Learned AO required the assessee to justify why additional depreciation @10% in AY 2015-16 has been claimed when the new plant and machinery was neither purchased nor installed during the year.

The explanation of the assessee was not acceptable to the AO. According to him, before amendment from 1st April, 2016 the claim of the assessee on additional depreciation on plant and machinery purchased in AY 2014-15 of Rs. 1,46,75,508 is not allowable at all as per existing provisions of law. He therefore made the impugned disallowance. The assessee filed appeal before the Learned CIT(A). The Learned CIT(A) deleted the impugned disallowance of additional depreciation.

The issue for consideration in present case is whether additional depreciation if claimed @ 10% in one year, being the plant and machinery installed and put to use for the purposes of business for a period of less than 180 days, the balance 10% of the additional depreciation can be claimed in the succeeding year or not.

It is undisputed legal position that additional depreciation of 20% of the cost of new plant and machinery acquired and installed is allowable under Section 32(1)(iia) of the Income Tax Act, 1961 (IT Act) to an assessee engaged in the business of manufacture or production of any article or thing over and above the general depreciation allowance. In a case where the assessee claimed only 50% of the depreciation under second proviso to Section 32(1)(ii) of IT Act in the year in which the plant and machinery was acquired and put to use for less than 180 days, and the assessee is eligible to claim additional depreciation of 20% on said plant and machinery under Section 32(1)(iia) of IT Act and the assessee claimed only 10% of 20% in the preceding AY as plant and machinery was put to use in the second half of the year. Present Tribunal, therefore endorse the view of the Learned CIT(A). Accordingly, the appeal of the Revenue is dismissed.

Tags : DISALLOWANCE   DELETION   ADDITIONAL DEPRECIATION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved