This article examines the tribunal’s decision in the case of Vibracoustic India Pvt. Ltd., where the company contested the disallowance of additional depreciation for the Assessment Year 2014-15. The case delves into significant interpretations of depreciation laws and their application to business assets.
Vibracoustic India Pvt. Ltd., engaged in manufacturing anti-vibration auto parts, filed its return for A.Y. 2014-15 declaring significant income. The case was selected for scrutiny, leading to a contention over the additional depreciation claimed by the company.
The dispute centered around the claim of additional depreciation on plant and machinery. The assessing officer (AO) disallowed the claim, stating the assets were installed in a previous fiscal year, and the current year’s claim did not comply with the provisions as understood by the AO. The decision was upheld by the CIT(A), prompting the company to appeal to the tribunal.
The tribunal analyzed the provisions under Section 32(1)(iia) of the Income Tax Act, which allows additional depreciation. It referenced various judicial precedents supporting the claim that additional depreciation can be carried forward if the assets were used for less than 180 days in the year of purchase. This interpretation was crucial in deciding the case in favor of Vibracoustic, allowing them to claim the disputed depreciation.
The decision underscores the importance of understanding the specific provisions of tax laws regarding asset depreciation. It also highlights how tribunal decisions can hinge on interpretations that may vary significantly from the initial assessments by tax authorities. The case serves as a crucial reference for businesses and professionals dealing with similar issues.
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