Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Additional depreciation - Assessment year 2005-06 - Whether in order to claim additional depreciation under section 32(1)( iia), what is required to be satisfied is only that a new machinery or plant has been acquired and installed after 31-3-2002 by an assessee, who was already engaged in business of manufacture or production of any article or thing; said provision does not state that setting up of a new machinery or plant, which was acquired and installed after 31-3-2002 , should have any operational connectivity to article or thing that was already being manufactured by assessee - Held, yes FACTS The assessee-company was engaged in the business of manufacture of textile goods. During the relevant assessment year, it had set up a wind mill for generation of power and claimed additional depreciation thereon under section 32(1)( iia). The Assessing Officer disallowed the claim on the ground that the assessee was engaged only in the manufacture of textile goods and the setting up of a wind mill had absolutely no connection with the manufacture of textile goods. However, the Commissioner (Appeals) as well as the Tribunal allowed the assessee's claim of additional depreciation. On appeal to the High Court, the revenue, inter alia, contended that earlier the Tribunal, under similar circumstances, had disallowed the additional depreciation claimed under section 32(1)( iia) whereas by the impugned order, the Tribunal had taken a diametrically opposite view and on that ground itself the order was liable to be set aside. HELD When the Tribunal, by the impugned order, had applied section 32(1)(iia ) to the facts of the case of the assessee and had found that it was entitled to the additional depreciation claimed under the said provision, it could not be held that simply because the co-ordinate Bench of the Tribunal had earlier taken a different view, the Tribunal in the instant case also ought to have followed the same. When the Tribunal had applied the law correctly in the impugned order, there was no gain saying that there was an earlier order by the co-ordinate Bench and, therefore, for that reason, in the…

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