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Additional Depreciation

Tax queries 1439 views 3 replies

Dear All,

Our's is a construction company engaged in construciton of Bridges, Roads, Industrial Buildings etc., We have claimed addtional depreciation on our construction equipment used in construction and also in pre fabricating gudders etc., The concerned Asessing Officer is of the opinion of disallow the same.

Can we claim the above depreciation ? if yes please, refer me the relevant case laws if any available.

regards

Pradyumna t s

Replies (3)

Mr. Pradyumna could you please tell me on what basis are they not allowing the additional depreciation.


In the given case:

Madras High Court (HC) in the case of CIT v M/s Hi Tech Arai Limited (Taxpayer) [Tax Case (Appeal) Nos. 670 and 671 of 2009] on the issue of allowability of additional depreciation on newly set-up windmills, under the Indian Tax Law (ITL), where the setting up of windmills had no connection with the main business activity of the Taxpayer. The HC held that, for the purpose of claiming additional depreciation under the ITL, it is not required for the setting up of new machinery or plant to have any operational connectivity with the main business of the Taxpayer.

 

The assesse was allowed addtn dep. even the p/m was not associated with the main business, yhen why the IT officer is refusing in your case as your P/M is directly related to the main business activity.


In my opinion it will be allowed

dear TS pradyumna...............additional dep is allowed u/s 32(1)(iia) only if assessee in engaged in m/f or production of any article or thing........considering ur business activity i dont think there is any m/f or production of article in ur business........so accordingly the same will be disallowed

Please  refer the following case laws:

ITA 491/PN/2010 in the Case of

1.Shri Bharat Cement, shiroli Vs DCIT circle 2 Kolhapur and 

2. Cherian Varkey construction co P Ltd Vs UOI: 406 ITR 262 (Ker) of 1-12-2017

It is held that Road contractors are allowed to claim Additional Depreciation 


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