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2014 (9) TMI 211 - ITAT PUNEDepreciation on the Wind Mill on pro-rata basis – Nature of work and rate of depreciation - Whether the earth work and the foundation is nothing but civil work on which depreciation is allowable @ 10% whereas installation and commissioning work constitute block of plant and machinery on which depreciation is allowable @ 15% - Held that:- The cost of the new wind turbine will include cost of component & accessory, cost of component for generation of electricity supply of rotor blades, electrical items, cost of tubular tower, cost of work including foundation work and labour related cost – as decided in ITAT, Pune in the case of Poonawala Finwest & Agro (P) Ltd. Vs. ACIT [2008 (6) TMI 586 - ITAT PUNE] – The functional test of the foundation has been explained by the CIT(A). So far as the foundation is concerned, the functional test is fulfilled - There should not be quarrel that civil work is involved in the erection of the foundation, but every civil work cannot be treated as civil work as required for bringing construction - cost on the foundation of the wind mill is eligible for the depreciation at the rate 180% or the rate which is applicable to the wind mill as it is integral part of cost of wind mill erection - Same way, the cost for commission and erection cannot be said to be separate from the wind mill as it is directly related to the functioning of wind mill - CIT(A) has rightly allowed the depreciation on the pro rata basis on the cost of foundation to the extent of the civil work - also in Assistant Commissioner of Income Tax (OSD) Versus Parry Engineering & Electronics P. Ltd. [2012 (10) TMI 224 - ITAT, AHMEDABAD] it has been held that the foundation is a part of the turbine and is eligible for the rate of depreciation which is applicable to the wind mill – the order of the CIT(A) is upheld – Decided against Revenue.
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