The Commissioner Of Income Tax vs M/S. Kitex Garments Ltd
2021 Latest Caselaw 16533 Ker

            IN THE HIGH COURT OF KERALA AT ERNAKULAM
                              PRESENT
                THE HONOURABLE MR.JUSTICE S.V.BHATTI
                                  &
        THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
    THURSDAY, THE 5TH DAY OF AUGUST 2021 / 14TH SRAVANA, 1943
                         ITA NO. 138 OF 2014
  AGAINST THE ORDER IN ITA 75/2012 OF I.T.A.TRIBUNAL,COCHIN BENCH,
                             ERNAKULAM
APPELLANT/S:

          THE COMMISSIONER OF INCOME TAX-1
          COCHIN.

          BY ADVS.
          SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)
          SRI.JOSE JOSEPH, SC, FOR INCOME TAX



RESPONDENT/S:

          M/S. KITEX GARMENTS LTD.
          91,PATTIMATTOM,KIZHAKKAMBALAM. CHOORAKODU,
          ERANAKUALM - 683562

          BY ADVS.
          SRI.ANIL D. NAIR
          SRI.JOSE JOSEPH CHEMPLAYIL
          SMT.C.S.SULEKHA BEEVI
          SRI.R.SREEJITH
          KUM.SOUMYA PRAKASH




      THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 05.08.2021,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 I.T.A. No.138/2014
                                   -2-




                        JUDGMENT

S.V.Bhatti, J.

Heard learned Standing Counsel Mr. Jose Joseph and

learned Counsel Mr. Anil D. Nair for parties.

2. The Commissioner of Income Tax/Revenue is the

appellant. M/s.Kitex Garments Ltd/Assessee is the respondent.

The subject appeal is at the instance of Revenue from the order

of Income Tax Appellate Tribunal (for short 'the Tribunal')

Cochin Bench in ITA No.75/Coch/2012 dated 31.12.2013. The

controversies canvassed in the appeal relate to the Assessment

Year 2008-09.

3. The appeal deals with the controversy on availing

50% of depreciation unavailed under Section 32(1)(iia) in the

previous year ending on 31.03.2008, whether could be allowed I.T.A. No.138/2014

in the subsequent year or not. Substantial questions raised read

as follows:

"1. Whether, on the facts and in the circumstances of the case and on an interpretation of Sec. 32(1)(iia) read with the second proviso the Tribunal is right in law in holding that "the balance 50% of the depreciation has to be allowed in the subsequent year" and is not the above finding against law and perverse?

2. Whether, on the Tribunal is right in law in holding that "the second proviso to section 32(1)(ii) is to mean that 10% should be allowed in the year in which the machinery is acquired and installed and the balance 10% has to be impliedly allowed in the subsequent year" and is not the above interpretation and approach against law and the intention of the legislature?"

4.1 The circumstances leading to the disagreement

between he Revenue and the assessee are not in dispute and the

fact that the assessee at the first instance availed 50% of

additional depreciation allowed under Section32(1)(iia) of the

Act. The assessee could avail 50% of allowed depreciation on

account of the fact that the equipment for which depreciation I.T.A. No.138/2014

was claimed was not used for more than 180 days in the

previous year 2007-08. Thus, the assessee claimed 10% of

permissible 20% depreciation in the previous year 2007-08 and

claimed balance 50%, i.e., 10% of 20%, in the Assessment Year

2008-09. The Tribunal held that there is no restriction in the

Income Tax Act from availing balance of one-time-incentive in

the form of additional sum of depreciation in the subsequent

year.

4.2 Learned Senior Counsel appearing for the assessee

refers to and relies on the judgments in Commissioner of Income-

tax, Madurai v. T P Textiles (P) Ltd.1 and Commissioner of Income-tax,

Bangalore v. Rittal India (P) Ltd 2 for sustaining the view taken by

the Tribunal. It is also argued that the clarificatory amendment

made to Section 32(1)(ii) with effect from 01.10.2016 also

supports the deduction claimed by the assessee. The

1 (2017) 79 taxmann.com 411 (Madras) 2 (2016) 66 taxmann.com 4 (Karnataka) I.T.A. No.138/2014

amendment, no doubt, was introduced with effect from

01.10.2016, is a clarificatory amendment. The decisions relied

on by the assessee are directly on the point and we are in full

agreement with the view taken by the Madras and Karnataka

High Courts. The proposition sated in the reported judgment

applies in all fours. By following the reasons and principles laid

down in T P Textiles (P) Ltd. and Rittal India (P) Ltd (supra),

substantial questions are answered against the Revenue and in

favour of the assessee. No order as to costs.

Sd/-

S.V.BHATTI JUDGE

Sd/-

BECHU KURIAN THOMAS JUDGE

jjj I.T.A. No.138/2014

APPENDIX OF ITA 138/2014

PETITIONER ANNEXURE

ANNEXURE A COPY OF THE ASSESSMENT ORDER U/S.143(3) DT.

21/12/2010 PASSED BY THE ASSESSING OFFICER FOR AY 2008-09.

ANNEXURE B COPY OF THE CIT(A)'S ORDER NO.ITA-85/R-1/E/CIT(A)-

II/10-11 DATED 20.12.2011

ANNEXURE C COPY OF THE ITAT, COCHIN BENCH'S ORDER ITA NO.75/COCH/2012 DATED 31-12-2013.