2021 (8) TMI 792 - AT - Income Tax

Depreciation on wind power generation plant - DR said that the wind mill plant was not commissioned during the year under consideration therefore, the assessee is not eligible for the claim of depreciation - HELD THAT - The wind power generation plant was commissioned during the financial year under consideration and, therefore, the assessee is very much eligible for claim of depreciation which has been rightly allowed by the CIT(A). We, therefore, do not find any error in the findings of the CIT(A). The appeal filed by the revenue is accordingly dismissed.

Summary

Issues:
1. Allowance of depreciation on wind power generation plant for A.Y. 2006-07.

Analysis:
The appeal before the Appellate Tribunal ITAT Delhi involved the issue of allowing depreciation of ?3.04 crores claimed on a wind power generation plant for the assessment year 2006-07. The appellant, a company engaged in processing and export of rice, had also ventured into the business of wind power generation during the relevant year. The initial assessment framed under section 143(3) of the Act was set aside by the PCIT under section 263, directing the AO to verify the genuineness of the depreciation claim on the wind power plant. Subsequently, the AO disallowed the depreciation amount. The CIT(A) allowed the claim of depreciation after verifying the facts. The main contention of the revenue was that the wind mill plant was not commissioned during the relevant year, making the assessee ineligible for depreciation claim.

The AO disallowed the depreciation primarily on the grounds that the plant could not have been set up by the end of the relevant year, as evidenced by the sale bill date and lack of transportation evidence. Additionally, the Power Purchase Agreement was deemed antedated, and the auditor's report did not mention wind power generation business or depreciation claim. The Tribunal examined the Power Purchase Agreement and lorry receipts to ascertain the timeline of plant dispatch. Invoices from the seller and clarifications provided by Suzlon Energy Ltd. were also reviewed. The commissioning certificate issued by Karnataka Power Transmission Corporation Limited confirmed the plant's commissioning on 31.03.2006. Based on the conclusive evidence, the Tribunal upheld the CIT(A)'s decision to allow the depreciation claim, dismissing the revenue's appeal.

In conclusion, the Tribunal found no error in the CIT(A)'s decision to allow depreciation on the wind power generation plant for the assessment year 2006-07. The appeal filed by the revenue was consequently dismissed, affirming the eligibility of the assessee for the depreciation claim.