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Issues involved: Claim of depreciation on windmills including civil and electrical works.
Summary: In the present case, the assessees appealed against the restriction imposed by the CIT(A) on their claim of depreciation on windmills, specifically on the civil and electrical works associated with setting up the windmills. The assessees argued that the civil and electrical works were integral to the windmill installation and should be considered part of the windmill for depreciation purposes. The Assessing Officer (A.O.) initially disallowed the claim, stating that civil work and electrical fittings were only eligible for 10% depreciation. However, upon further review, the A.O. acknowledged that the civil work and electrical fittings were indeed for the installation of the windmill. The assessees contended that they should be allowed higher depreciation rates on these components as well. The dispute centered around whether the civil and electrical works could be considered essential for the windmill installation to qualify for higher depreciation rates. The Appellate Tribunal considered the arguments presented by both parties. The A.R. for the assessees relied on previous Tribunal decisions to support their claim that the civil and electrical works should be eligible for higher depreciation rates. The D.R., on the other hand, supported the lower authorities' decisions. The Tribunal noted that the A.O. had accepted that the civil work and electrical fittings were necessary for the windmill installation, indicating that they should be considered part of the windmill for depreciation purposes. The Tribunal referenced previous decisions that affirmed the eligibility of civil and electrical works for enhanced depreciation on windmills. Based on the arguments and precedents cited, the Tribunal ruled in favor of the assessees, directing the A.O. to allow depreciation on windmills, including the civil work and electrical fittings. The appeals were allowed, and the disallowance of depreciation on these components was overturned. The decision was pronounced on 09-07-2010.
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