2013 (4) TMI 846 - AT - Income Tax

Summary

Issues involved: The issue involves the entitlement of the assessee for 80% depreciation on civil work, electrical items, and fees paid to the Maharashtra Energy Development Agency (MEDA) as part of the windmill.

Depreciation on Civil Work and Electrical Items:
The assessee purchased windmills and capitalized the cost, claiming 80% depreciation. The Assessing Officer disallowed depreciation on certain items, including civil work and electrical items, stating they were not part of the windmills. However, the Ld.CIT(A) held that civil work and foundation are integral parts of the windmill, justifying 80% depreciation. This decision was supported by the ITAT Pune's ruling in similar cases. Regarding electrical items, the Ld.CIT(A) followed precedent and allowed 80% depreciation. The Tribunal affirmed these decisions, stating that the cost of foundation, erection, and installation of the windmill are eligible for 80% depreciation as they are integral to the windmill's functioning.

Fees Paid to MEDA:
The fees paid to MEDA were also considered part of the windmill's expenditure by the Ld.CIT(A) and treated as revenue expenditure. The Tribunal upheld this decision, emphasizing that the fees were integral to the windmill's operation and should be included in the depreciation calculation. The Tribunal's ruling in a similar case supported this interpretation, leading to the dismissal of the revenue's appeal.

In conclusion, the Appellate Tribunal ITAT Pune upheld the Ld.CIT(A)'s decision to allow 80% depreciation on civil work, electrical items, and fees paid to MEDA as part of the windmill. The Tribunal's analysis of the integral nature of these expenses to the windmill's operation guided the decision to dismiss the revenue's appeal.