Allowed

The Commissioner of Income Tax, v. M/S.Appolo Tyres Limited

Kerala HC2 Aug 2021ITA/166/2014

Case brief

AI extract

What is this about?

This Income Tax Appeal concerned the availability of unavailed 50% depreciation incentive under Section 32(1)(iia) for the subsequent year. The High Court relied on Madras and Karnataka High Court judgments to allow the claim and dismissed the Revenue's appeal.

What did the court decide?

Substantial questions were answered against the Revenue and in favour of the assessee; no order on costs.

The Commissioner of Income Tax, Vs M/S.Appolo Tyres Limited — Income Tax | Kerala HC (2021)

¶1

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶2

PRESENT

¶3

THE HONOURABLE MR.JUSTICE S.V.BHATTI

¶4

¶5

THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS MONDAY, THE 2^ND DAY OF AUGUST 2021 / 11TH SRAVANA, 1943 ITA NO. 166 OF 2014

¶6

AGAINST THE ORDER IN IT(TP)A 4/2013 OF I.T.A.TRIBUNAL,COCHIN BENCH, ERNAKULAM

¶7

APPELLANT/S:

¶8

THE COMMISSIONER OF INCOME TAX, COCHIN.

¶9

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

¶10

SRI.CHRISTOPHER ABRAHAM

¶11

RESPONDENT/S:

¶12

M/S.APPOLO TYRES LIMITED, 6TH FLOOR, CHERUPUZHPAM BUILDINGS, SHANMUGHAM ROAD, COCHIN.

¶13

BY ADVS. SRI.V.ABRAHAM MARKOS SRI.ABRAHAM JOSEPH MARKOS SRI.BINU MATHEW SRI.ISAAC THOMAS SRI.JOSEPH MARKOSE SR. SRI.NOBY THOMAS CYRIAC SRI.TOM THOMAS KAKKUZHIYIL

¶14

THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 02.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

¶15

I.T.A. No.166/2014

-2-

J U D G M E N T

S.V.Bhatti, J.

Heard learned Standing Counsel Mr. Christopher Abraham and learned Senior Counsel Mr. Joseph Markos for parties.

¶20

The Commissioner of Income Tax/Revenue is the appellant. M/s.Apollo Tyres Ltd., Kochi/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 IT(TP)A No.04/Coch/2013 dated 07.03.2014. The controversies relate to the Assessment Year 2008-09.

¶21

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

¶22

I.T.A. No.166/2014

¶23

-3-

¶24

in the subsequent year or not. Substantial questions raised read

¶25

as follows:

¶26

“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?”

¶27

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

¶28

I.T.A. No.166/2014

¶29

-4-

¶30

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.

¶31

4.2 Learned Senior Counsel appearing for the assessee refers to and relies on the judgments in Commissioner of Incometax, Madurai v. T P Textiles (P) Ltd.¹ and Commissioner of Income-tax, Bangalore v. Rittal India (P) Ltd² 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

¶32

1 (2017) 79 taxmann.com 411 (Madras)

¶33

2 (2016) 66 taxmann.com 4 (Karnataka)

¶34

I.T.A. No.166/2014

¶35

-5-

¶36

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.166/2014

¶45

-6-

¶46

APPENDIX OF ITA 166/2014

¶47

PETITIONER ANNEXURE ANNEXURE A COPY OF THE ASSESSMENT ORDER U/S.143(3) DT. 17/12/2012 PASSED BY THE ASSESSING OFFICER FOR AY 2008-09. ANNEXURE B COPY OF THE ITAT'S ORDER ITA NO.04/COCH/2013 DATED 07/03/2014 FOR ASSESSMENT YEAR 2008-09.

The Commissioner of Income Tax, v. M/S.Appolo Tyres Limited

Case brief

What is this about?

What did the court decide?

The Commissioner of Income Tax, v. M/S.Appolo Tyres Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

G.Soman Vs the Assistant Commissioner of Income Tax

The Commissioner of Income Tax Vs M/S.Appolo Tyres Ltd.

M/S.Appolo Tyres Ltd. Vs the Deputy Commissioner of Income-Tax

M/S. Hindaco Employees Co-Operative Credit Society Ltd. No 3304 Vs the Commissioner of Income Tax

Sea Food Park Ltd. Vs Dy .Cit.Circle 4(1)

The Commissioner of Income TAX-1, Vs M/S.Appollo Tyres Ltd.