2014 (4) TMI 180 - AT - Income Tax

Depreciation claimed on parts of Wind Mill at rate of 80% - evacuation equipments - civil work of foundation - electrical supply line and others CIT(A) deleted entire addition by allowing depreciation at rate of 80% - Held that - all items are part and parcel of Wind Mills, as discussed in decisions relief on by ld. AR in his Written Submission - No reason to deviate from decision taken by ld. CIT(A) - Confirm impugned deletion and cannot allow appeal of revenue Decided against Revenue.

Summary

Issues involved:
1. Disallowance of depreciation on evacuation equipment.
2. Disallowance of depreciation on civil work of foundation and others.
3. Disallowance of depreciation on electrical supply line and others.

Detailed Analysis:
1. The appeal pertains to the Assessment Year 2009-10 where the assessee, a private limited company engaged in manufacturing Process Control Instruments, claimed depreciation on a Wind Turbine Generator installed in Rajasthan. The Assessing Officer disallowed or reduced the claimed depreciation on various grounds, resulting in an addition of Rs. 25,15,190. The ld. CIT(A) later deleted the entire addition by allowing depreciation at the rate of 80% on the disputed items. The revenue challenged this decision, specifically focusing on the disallowance of depreciation on evacuation equipment amounting to Rs. 7,94,160.
2. The second issue raised by the revenue was the disallowance of depreciation amounting to Rs. 10,63,814 on civil work of foundation and other related expenses. The ld. CIT(A) had deleted this disallowance, and the revenue contested this decision, arguing that the CIT(A) had not considered any new material evidence or recent judgments favoring the assessee's position.
3. The third issue concerned the disallowance of depreciation of Rs. 6,57,215 claimed on electrical supply line and related expenses. The ld. CIT(A) had allowed this depreciation, leading to the revenue's dissatisfaction and subsequent appeal. The revenue failed to present any contradictory decisions, and after reviewing the submissions and relevant case law, the Tribunal upheld the CIT(A)'s decision, emphasizing that the disputed items were integral to the Wind Mill setup, as highlighted in the arguments presented by the assessee.

In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order and allowing the claimed depreciation on the evacuation equipment, civil work of foundation, and electrical supply line. The Tribunal found no reason to overturn the CIT(A)'s decision, as all the contested items were deemed essential components of the Wind Mill setup, warranting the allowed depreciation rates.