The Commissioner of Income-tax Chennai v. Aztec Auto Pvt. Ltd
[Citation -2020-LL-0907-21]

Citation 2020-LL-0907-21
Appellant Name The Commissioner of Income-tax Chennai
Respondent Name Aztec Auto Pvt. Ltd.
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 07/09/2020
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags additional depreciation • excess depreciation • escaped assessment • set off and carry forward of unabsorbed depreciation
Bot Summary: The CIT(A) took note of the decision above mentioned and observed that those were rendered after considering the decisions in Brakes India and M/s CRI Pumps Pvt., Ltd., Vs.ACIT and it was held that additional depreciation to the extent not claimed by the assessee in the earlier year ought to be allowed. Without noting the fact that there were several decisions, one of which, the decision of the Division Bench of this Court in M.M.Forgings Vs. ACIT, Company Range-IV, Chennai reported in 2012 349 ITR 673 Madras. Though the decision of the jurisdictional High Court in the case of M.M.Forgings Limited, was available which was in favour of the revenue and against the assessee. 551 of 2013 and the Division Bench noted the decision in Rittal India Limited as well as M.M.Forgings and ultimately, allowed the appeal filed by the assessee. 267 of 2020 No.157 of 2017 dated 06.03.2017, which was decided in favour of the assessee and in which decision, the decision in the case of Rittal India Ltd., was also referred to. In our considered view, the effect of the insertion of the proviso in the year 2016, may not have a bearring on the present issue, as during the relevant assessment year 2009-2010, the law which has been settled by the Division Bench of this Court is the case of Brakes India, against the said decision, the revenue preferred an appeal before the Hon'ble Supreme Court in S.L.P.(C) No.033755/2017 which was dismissed by an order dated 24.09.2018. Thus, the decision of the Division Bench in the case of Brakes India having been approved by the Hon'ble Supreme Court, we are bound by the said decision and accordingly, following the same.


T.C.A.No.267 of 2020 IN HIGH COURT OF JUDICATURE AT MADRAS Dated: 07.09.2020 Coram HONOURABLE Mr. JUSTICE T.S.SIVAGNANAM AND HONOURABLE Mrs. JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.267 of 2020 Commissioner of Income Tax Chennai .. Appellant Vs. M/s Aztec Auto Pvt., Ltd., 88, Sidco Industrial Estate, Ambattur, Chennai - 600098 ..Respondent Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961, is directed against Order passed by Income Tax Appellate Tribunal C Bench in I.T.A No.2751/Mds/2016 dated 21.02.2016 for assessment year 2009-2010 For Appellant : Mr.T.Ravikumar Senior Standing Counsel 1/9 http://www.judis.nic.in T.C.A.No.267 of 2020 JUDGMENT [Judgment of Court was delivered by T.S.SIVAGNANAM, J.] Heard Mr.T.Ravikumar, learned senior counsel for appellant / revenue. 2. This appeal filed by revenue under Section 260-A of Income Tax Act, 1961 ['the Act' for brevity] is directed against order passed by ITAT, 'C' Bench in I.T.A.No.2751/Mds/2016 dated 21.02.2016 for assessment year 2009-2010. 3. appellant / revenue has filed following substantial questions of law for consideration: '1. Whether on facts and in circumstances of case, Tribunal was right in holding that assessee is eligible to carry forward unabsorbed additional depreciation as per provisions of Section 32(1)(iia)? 2. Is not finding of Tribunal bad especially when as per proviso to Section 32(a)(ii) restricts depreciation allowable to 10% in year in which 2/9 http://www.judis.nic.in T.C.A.No.267 of 2020 assets was acquired and installed and in present case assets was acquired in 2nd half of financial year 2007-08 and there being no provisions under Act permitting balance to be carry forwarded to be allowed in succeeding year?' 4. We have elaborately heard learned senior counsel for appellant / revenue. 5. assessee is private limited company had filed its return of income for assessment year 2009-2010 on 28.09.2009 admitting income of Rs.71,83,530/- assessee's case was selected for scrutiny and income returned was accepted, subsequently, case was re-opened under Section 147 of Act by issuance of notice under Section 148 of Act on 26.03.2014 on ground that asset which was purchased and put to use in previous year for less than 180 days only 10% depreciation was claimed and assessee has claimed additional depreciation for assessment year 2009-2010 and therefore, there was reason to believe that excess depreciation in respect of additional depreciation of Rs.4,33,414/- has escaped assessment warranting reopening. 3/9 http://www.judis.nic.in T.C.A.No.267 of 2020 6. assessing officer was of view that assessee has claimed arrears of depreciation under Section 32(1)(iia) amounting to Rs.4,33,414/- in respect of asset under head 'Plant and Machinery' acquired in 2nd half of financial year 2007-2008, for which, additional depreciation at 10% was allowed for assessment year 2008-2009. Further, assessing officer was of view that there was no provision under Act permitting balance depreciation to be allowed in succeeding year. explanation offered by assessee did not find favour with assessing officer and accordingly, he disallowed claim and added same to total income of assessee under head income or professional and established at total income of Rs.76,16,945/- 7. assessee preferred appeal before Commissioner of Income Tax [Appeals]-I CIT(A), Chennai, who by order dated 14.07.2016 allowed appeal. In doing so, followed decision of M/s Addison & Company Vs. DCIT in I.T.A.No.2198/Mds/2015 dated 04.03.2016. In this order, Tribunal noted decision in case of 4/9 http://www.judis.nic.in T.C.A.No.267 of 2020 DCIT Vs. Brakes India Limited in I.T.A.No.1609/Mds/2010 dated 06.01.2012, which was decided against assessee. However, CIT(A) took note of decision above mentioned and observed that those were rendered after considering decisions in Brakes India and M/s CRI Pumps Pvt., Ltd., Vs.ACIT and it was held that additional depreciation to extent not claimed by assessee in earlier year ought to be allowed. 8. CIT(A) also followed its own decision in case of Associated Printers (Madras) Pvt., Ltd., dated 14.01.2016 and accordingly, appeal was allowed. revenue carried matter by way of appeal to Tribunal. Tribunal by impugned order dismissed appeal filed by Revenue taking note of decision of High Court of Karnataka in CIT V. Rittal India (P.) Limited reported in 380 ITR 423. 9. As rightly pointed out by Mr.T.Ravikumar, learned senior standing counsel for appellant, Tribunal erred in holding that there was no Judgment in any other High Court, which is in favour of 5/9 http://www.judis.nic.in T.C.A.No.267 of 2020 Department. Without noting fact that there were several decisions, one of which, decision of Division Bench of this Court in M.M.Forgings Vs. ACIT, Company Range-IV, Chennai reported in [2012] 349 ITR 673 [Madras]. Iy appears that said decision was not brought to notice of Tribunal, which choose to follow decision of High Court of Karnataka. Though decision of jurisdictional High Court in case of M.M.Forgings Limited, was available which was in favour of revenue and against assessee. 10. Be that as it may, decision of Tribunal in case of Brakes India Ltd., dated 06.01.2012 was appealed against before Division Bench of this Court in T.C.A.No.551 of 2013 and Division Bench noted decision in Rittal India Limited as well as M.M.Forgings and ultimately, allowed appeal filed by assessee. In doing so, Division Bench of this Court distinguished decision in case of M.M.Forgings by observing that said case was not concerned with issue with regard to right to carry forward balance additional depreciation and followed decision in case of Commissioner of Income Tax, Madurai Vs. M/s Shri T.P. Textiles Private Limited in TCA 6/9 http://www.judis.nic.in T.C.A.No.267 of 2020 No.157 of 2017 dated 06.03.2017, which was decided in favour of assessee and in which decision, decision in case of Rittal India Ltd., was also referred to. 11. learned senior counsel for revenue also pointed out that so far as claim of balance 50% of amount as deduction was provided for inserting proviso under Section 32(1) and such insertion was with effect from 01.04.2016 by Finance Act, 2015. 12. In our considered view, effect of insertion of proviso in year 2016, may not have bearring on present issue, as during relevant assessment year 2009-2010, law which has been settled by Division Bench of this Court is case of Brakes India, against said decision, revenue preferred appeal before Hon'ble Supreme Court in S.L.P.(C) No.033755/2017 which was dismissed by order dated 24.09.2018. Thus, decision of Division Bench in case of Brakes India having been approved by Hon'ble Supreme Court, we are bound by said decision and accordingly, following same. 7/9 http://www.judis.nic.in T.C.A.No.267 of 2020 For above reasons, appeal filed by Revenue is dismissed and substantial question of law is answered against Revenue. No costs. (T.S.S.J.) (V.B.S.J.) 07.09.2020 Index :Yes / No Internet :Yes / No Speaking Judgment / Non Speaking Judgment ssd To Income Tax Appellate Tribunal C Bench 8/9 http://www.judis.nic.in T.C.A.No.267 of 2020 T.S.SIVAGNANAM,J., AND V.BHAVANI SUBBAROYAN, J., ssd T.C.A.No.267 of 2020 07.09.2020 9/9 http://www.judis.nic.in Commissioner of Income-tax Chennai v. Aztec Auto Pvt. Ltd
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