2016 (4) TMI 265 - HC - Income Tax

Depreciation claimed on Windmill - Held that - Both the CIT(A) as well as the Tribunal have recorded a finding of fact that the items listed at (a) to (d) in paragraph(3) i.e (a) Power Evacuation Infrastructure, (b) Erection and commissioning charges,(c) Line work &(d) Electrical items above form an integral part of the Windmill. Thus, entitled to 80% depreciation being a part of a Windmill. Depreciation on cost of civil foundation - Held that - As is agreed position between the parties that the issue raised herein stands concluded against the Revenue by the decision of this Court in Cooper Foundary Pvt Ltd (2011 (6) TMI 837 - BOMBAY HIGH COURT) i.e. the cost of civil foundation is to be allowed depreciation @80%.

Summary

Issues:
1. Depreciation on expenses incurred on Power Evacuation Infrastructure, Erection and Commissioning, Line Work, and Electrical Fittings.
2. Depreciation on the cost of civil foundation work.

Issue 1:
The appellant challenged the Tribunal's decision to allow depreciation at 80% on expenses related to Power Evacuation Infrastructure, Erection and Commissioning, Line Work, and Electrical Fittings, arguing that these were not part of the Windmill and should be eligible for depreciation at 15% as items of Plant and Machinery. The Respondent-assessee capitalized the cost of Windmills and claimed depreciation at 80%, which the Assessing Officer disputed. The Commissioner of Income Tax(Appeals) partially upheld the claim, and both parties appealed to the Tribunal. The Tribunal upheld the depreciation at 80% for certain items and allowed the appeal for other expenses related to setting up the Windmill. The High Court found that the items in question were integral parts of the Windmill, following precedents and concurrent findings of fact. The Court dismissed the appeal, citing no substantial question of law.

Issue 2:
The second issue involved the depreciation on the cost of civil foundation work. The High Court noted that this matter was previously decided in a case involving Cooper Foundary Pvt Ltd, where depreciation at 80% was allowed. As the issue was settled law, the Court did not entertain the question raised by the appellant. Consequently, the appeal was dismissed, and no costs were awarded.

In conclusion, the High Court upheld the Tribunal's decision regarding depreciation on various expenses related to setting up Windmills and the civil foundation work, citing precedents and settled law. The appellant's appeal was dismissed on both issues, and no costs were awarded.