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Publishing houses have cause for cheer with the Central Board of Direct Taxes (CBDT) clarifying that they would be eligible to claim additional depreciation on plant and machinery deployed by them.
The business of printing and publishing amounts to “manufacture” or “production of an article or thing” and thereby eligible for additional depreciation under the income tax law, the CBDT said in a clarificatory circular.
This would come as music to the ears of several publishing and printing businesses who are litigating this matter in various Courts and Tribunals. They could now avail additional depreciation of 20 per cent on the normal depreciation rate of 15 percent specified for plant and machinery.
While arriving at this position, the CBDT has accepted the Kerala High Court ruling (in Mathrubhoomi Printing & Publishing Co) and Delhi High Court ruling (in Delhi Patra Prakashan Ltd). In both the rulings, it was held that printing and publishing is a “manufacturing activity” and thus eligible for additional depreciation.
Experts’ takeCommenting on the CBDT move, Neha Malhotra, Executive Director, Nangia & Co, a CA firm, said that CBDT seems to be on a spree to settle legal position on litigative issues, to reduce avoidable litigation causing undue hardship on the assesses.
“Printing and publication houses can take a sigh of relief that litigation on this aspect is over and those taking a conservative view of not claiming additional depreciation can now claim the same,” Malhotra said.
Reduction in litigation saves time and energy of both the government and taxpayers at large, she added.
Amit Singhania, Partner, Shardul Amarchand Mangaldas & Co, a law firm, said that the CBDT circular will bring certainty for publishing sector as the industry would be eligible to claim additional depreciation on plant and machinery deployed by them.
Also, the CBDT circular has directed tax officers to withdraw pending cases and not to file any appeals henceforth on this matter, Singhania added.
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