2016 (7) TMI 708 - HC - Income Tax

Depreciation claimed on civil foundation as well as on electric turbine generator for the wind mill - Held that - The issue before the Madras High Court in the case of Hi Tech Arai Ltd. 2009 (9) TMI 60 - MADRAS HIGH COURT was again of a wind mill where depreciation on power generation was claimed. It was found that main business of the assessee was not of producing or generating electricity and thus, the Madras High Court decided the issue in favour of the assessee and against the revenue. The issue having been confirmed by the Apex Court on dismissal of appeal, we are unable to take a different view as has been taken by the Madras High Court and has to be applied herein also. - Decided against revenue

Summary

Issues:
1. Depreciation claimed on civil foundation and electric turbine generator for wind mill.
2. Rate of depreciation claimed by the assessee.

Analysis:
1. Depreciation claimed on civil foundation and electric turbine generator for wind mill:
The main contention in this case was the depreciation claimed by the assessee on the civil foundation and electric turbine generator for a wind mill. The revenue argued that the Tribunal had not properly addressed the issue of the rate of depreciation and allowed the appeal in favor of the assessee without proper consideration of the law and facts. The revenue claimed that the depreciation and additional depreciation were not admissible at the rate claimed by the assessee. However, the assessee argued that the issue of admissibility of depreciation had been settled by previous judgments, including one by the Madras High Court, which was affirmed by the Apex Court. The assessee contended that since the electrical items and construction were attached to the wind mill, the depreciation should be allowed at the rate claimed. The Assessing Officer had already allowed the depreciation and additional depreciation, and the Tribunal was right in setting aside the order passed by the assessing authority. The High Court upheld the Tribunal's decision, stating that the issue of admissibility of depreciation had already been settled by the Apex Court, and thus, there was no need for further dispute.

2. Rate of depreciation claimed by the assessee:
The second issue raised was regarding the rate of depreciation claimed by the assessee. The revenue argued that the rate of depreciation claimed should not have been allowed, but this issue was not properly decided by the Tribunal. The High Court, after considering the arguments from both sides, found that when the civil work and electric generator were considered a part of the wind mill, the rate applicable for the wind mill's depreciation should apply in this case as well. The High Court concluded that there was no dispute regarding the rate of depreciation admissible to the assessee, and the Tribunal had rightly allowed the appeal. Therefore, the High Court dismissed the appeal by the revenue, upholding the Tribunal's decision.

In summary, the High Court dismissed the appeal by the revenue, upholding the Tribunal's decision to allow the depreciation claimed by the assessee on the civil foundation and electric turbine generator for the wind mill. The High Court also found that there was no dispute regarding the rate of depreciation applicable to the assessee, and thus, upheld the Tribunal's decision on this issue as well.