2013 (1) TMI 840 - AT - Income Tax

Summary

Issues involved: Whether a Wind Mill commissioned on the last day of the F.Y. (on 31.03.2008) is entitled for depreciation.

Comprehensive Details:

Issue 1: Entitlement for Depreciation
- The assessee installed two Wind-Mills before 31.03.2008 at Sirund Village in Gadak Taluka of Distt. Karnathka.
- The A.O. demanded proof of user by 31.03.2008, which the assessee provided through a certificate from the Executive Engineer of HESCOM, GADAG.
- The A.O. denied depreciation due to lack of proof of electricity generation and sale, supported by the ld. CIT(A).
- The appellant argued that the Wind-Mills were commissioned on 31.03.2008 and ready for use, with evidence of electricity generation.
- The Tribunal found sufficient evidence that the Wind-Mills were ready for use on 31.03.2008, making the assessee eligible for depreciation u/s 32 of the Act.
- The Tribunal equated "put to use" with "ready for use" for depreciation purposes, citing various judicial decisions in support.
- The appeal of the assessee was allowed by setting aside the previous finding.

Judicial Decisions Cited:
1. Hindustan Platinum P. Ltd ITA No. 3352/Mum/2010 dated 15.6.2011
2. Omkar Textiles P. Ltd 115 TTJ 716 [Ahd]
3. CIT Vs.Vidhyanchal Distilleries Pvt. Ltd 272 ITR 583 [MP]
4. CIT Vs. Vegetable Products Ltd. 88 ITR 192 [SC]
5. Narang Overseas Pvt. Ltd. Vs. ACIT 111 ITD 1 [Mum] [SB]

This judgment by the Appellate Tribunal ITAT JODHPUR addressed the issue of whether a Wind Mill commissioned on the last day of the financial year is entitled to depreciation. The assessee had installed two Wind-Mills before 31.03.2008 and claimed depreciation, which was denied by the A.O. due to lack of proof of electricity generation and sale. The Tribunal, after considering the evidence presented, concluded that the Wind-Mills were ready for use on 31.03.2008, making the assessee eligible for depreciation under Section 32 of the Act. The decision was supported by citing relevant judicial decisions equating "put to use" with "ready for use" in the context of depreciation.