9911796707
TMI Blog2006 (2) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... amil Nadu on the reason that the assessee could not have installed windmills on or before 31-3-1993. In respect of windmills said to have been installed at Mandvi in the State of Gujarat, the Assessing Officer found that there was no installation on the date of inspection. Therefore, the Assessing Officer disallowed the claim of the assessee in toto. On appeal by the assessee, the first Appellate Authority remanded back the issue of depreciation to the file of the Assessing Officer. Even in the reassessment proceedings, in pursuance of an order of remand by the CIT(A), the Assessing Officer confirmed the disallowance. The assessee filed appeal before the CIT(A) against the assessment order. A detailed written submission was filed regarding the claim of depreciation in respect of windmills said to be installed at Mandvi in the State of Gujarat and Perungudi and Kethanur in the State of Tamil Nadu. The CIT(A), while considering the appeal of the assessee, discussed only about the windmills said to be installed at Mandvi in the State of Gujarat. There was no discussion in respect of windmills installed at Perungudi and Kethanur in the State of Tamil Nadu. According to the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has rightly dealt with the issue. Therefore, it cannot be said there is an error in the order of this Tribunal dated 30-6-2003. According to the learned D.R., this Tribunal after elaborate consideration, found that no material was produced before the lower authorities to show that the windmills were in existence. This Tribunal specifically found that the very same position continued in the Appellate proceeding also. Therefore, according to the learned D.R., there is no error which is prima facie on the record. 5. We have considered the rival submissions on either side, and also perused the material available on record. Admittedly, the assessee has claimed depreciation on windmills at Rs. 7,60,68,275 in respect of windmills said to be installed at Mandvi in the State of Gujarat and Perungudi and Kethanur in the State of Tamil Nadu. Originally, the assessment order was passed disallowing claim of depreciation on 29-3-1996. The Assessing Officer specifically finds that at Mandvi no windmills were in existence. In respect of Perungudi and Kethanur in the State of Tamil Nadu, though windmills were in existence, no material was available to show that it was installed on or be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the windmills said to be installed at Mandvi, Perungudi and Kethanur. The claim of depreciation in respect of windmills said to be installed at Mandvi is only Rs. 21,94,960. In view of this factual position, in our opinion, the order of this Tribunal suffers an error which is apparent on the face of the record. Therefore, the order of this Tribunal dated 30-6-2003 requires to be rectified under section 254(2) of the Income-tax Act. 7. Accordingly, we rectify the order of this Tribunal dated 30-6-2003 as follows: "At page 6, in para 13A of the order of this Tribunal dated 30-6-2003, the following shall be inserted in the last line in between the word "order of the CIT(A)" and "on this point". in respect of windmill said to be installed at Mandvi in the State of Gujarat." After insertion of the above word, the last sentence of para 13A shall read as follows: "Even before us, the same position remained and therefore, we do not interfere with the order of the CIT(A) in respect of windmill said to be installed at Mandvi in the State of Gujarat on this point." The following shall be added as para 13B. "The assessee has also claimed depreciation in respect of windmills s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed order of the ld. Brother, but I am recording my reasons hereunder for deferring with the view taken by the ld. Brother. 10. The brief facts of the case are that the assessee has claimed depreciation of Rs. 7,60,68,275 on Wind Energy Equipment installed at Mandvi, Gujarat, Perungudi and Kethanur, Tamilnadu. The Assessing Officer, vide original assessment order dated 29-3-1996 rejected the claim of the assessee for depreciation. During the course of assessment, the Assessing Officer required the assessee to furnish the details of actual installation and commercial use and other details like date of installation, location of installation, date of issue of NOC, Safety Certificate, date of getting HT Connection and copy of agreement entered into with the Government, and details of power generation and also details of transportation of Wind Turbine Generators. The assessee did not furnish evidence and details in support of its claim that Wind Turbine Generators were actually installed and put into commercial use before 31-3-1993 and also not produced details of electricity generated. On enquiry, the Assessing Officer came to know that the Wind Mill at Kethanur and Perungudi thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to installation of Wind Turbine Generators installed by private companies in Gujarat, no installation has been made by NEPC Micon Ltd. (v) The arguments of the assessee has been contradictory and continuously changing. Reply filed by assessee's representative as a last resort on 20-3-1996 has been discussed in para 3.12 above where he almost concedes that wind turbine generators were not actually installed before 31-3-1993. (vi) The machine numbers of Generators claimed to have been installed by the assessee were not even purchased by the assessee as seen from Annexures IV V. As the assessee did not install the WTGs and put them to use the claim of depreciation of Rs. 7,60,68,275 is disallowed. Penalty proceedings under section 271(1)(c) is initiated separately for furnishing inaccurate particulars and concealing the income." 12. Aggrieved, the assessee went in appeal before the CIT(A). The CIT(A), vide order dated 18-10-1996, has set aside the issue to the file of the Assessing Officer with the following directions:- "In keeping with my order dated 1-10-1996 and 17-10-1996 in ITA No. 53/96-97 and ITA No. 54/96-97 in the case of NEPC Tea Garden Ltd., I am inclin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forces. The assessee's representative, in the letter further stated that wind mills/wind turbine generators concerned were small wind mills for which no clearance was required from GEDA, that sanction of GEDA was required only when electricity was sold to/through GEDA and that no agreement had been entered into with GEDA or transfer of electricity and hence there would be no records for wind mills/wind turbine generators in Mandvi with GEDA. Thus, despite the assessee's request for another opportunity to prove the existence of wind turbine generators, their installation and commissioning, the assessee failed to substantiate its claim and has also failed to carry out the directions of CIT(A)-II, Chennai, which were issued at the assessee's own behest. The existence of wind mills, their installation and commissioning were the basic requirements for allowance of depreciation thereon. The assessee has not been able to establish the existence of those wind turbine generators either physically or through documentation in an installed and commissioned condition. In the above circumstances, the disallowance of claim for depreciation in respect of those WTGs at Mandvi made in the original o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed the entire depreciation claimed on 53 Wind Turbine Generators. For the assessment year 1993-94, there is no such finding. On the other hand, the Assessing Officer disallowed the depreciation claim on the Wind Turbine Generators on the ground that the Assessee did not furnish details and necessary evidence in support of its claim that the Wind Turbine Generators were actually installed and put into commercial use before 31-3-1993. In view of the above, the claim of the Assessee's representative is not acceptable. As regards the Assessee's representative's claim that depreciation should be allowed on the basis of mere claim for sale which proved the existence of Wind Turbine Generators and usage of assets for commercial purposes was not necessary, it has to be pointed that for the purpose of allowance of depreciation, the asset should be kept ready for use. In the case of Wind Turbine Generators, on the basis of mere sales invoices, that cannot be taken to be kept ready for use. The concerned wind turbine generators should be in an installed condition and are ready to be connected with power grid. The Assessing Officer made detailed and extensive enquiry and furnished details in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared due to supernatural forces. It is clear from the recital in the order of assessment and in the submissions without substance made by the Appellant that there were in reality no such wind mills installed at Mandvi on which depreciation was admissible. I have, therefore, no hesitation in holding that the Appellant is not entitled to the depreciation claim of Rs. 7,60,68,275 which has been disallowed in the order of assessment." 15. Against this order, the Assessee has filed appeal before this Tribunal on the ground that the CIT (Appeals) has erred in sustaining the disallowance of depreciation on windmills by making one sided addition without going through the available facts and materials, considering only windmills installed at Mandvi, Gujarat State, without taking into account other installations. For purpose of clarity, the entire ground taken before thus Tribunal are annexed at Annexure-I to this order. This Tribunal disposed of this issue vide order dated 30-6-2003 in ITA No. 1666/Mds./2000 etc., as under: "Coming to the issue of disallowance of depreciation on wind mills, it is stated that the wind mills were installed and commissioned. However, this was not acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord. 18. After going through the facts and circumstances of the case, I am of the opinion that the Tribunal, after taking into account all the relevant facts on record and carefully considering the arguments of the rival parties has drawn to the conclusion that there was no necessity warranting interference in the order of the CIT (Appeals) on the issue that was before the Tribunal and rejected the claim of the Assessee. Hence, I see no mistake apparent from record in the order of the Tribunal under appeal. The above order of the Tribunal is based on the grounds raised before it and the issue which arose out of the order of the CIT (Appeals). The CIT (Appeals) has held in para 15 of his order that "This is again a set aside issue and the addition has been repeated in the fresh assessment". In view of these findings, the Tribunal has dealt with the issue and rejected the claim of depreciation. Merely because the Tribunal has not allowed the claim of the Assessee and even taking for granted that the conclusion drawn by the Tribunal, in the opinion of the Assessee, was wrong, that will not entitle the Assessee to form a ground and agitate before the Tribunal by means of a Miscella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wind mills, purported to have been installed by the assessee and put them into use before 31-3-1993. Existence of wind mills cannot be at vacuum and physical installation and putting them into commercial use of these mills are pre-requisites for claiming depreciation. The Tribunal has given its findings base on the entire materials available on record and applying its mind and the findings of the Tribunal cannot be challenged through this Miscellaneous Petition. Entertaining of this Miscellaneous Petition would only mean review of the order of this Tribunal for which the Tribunal has no power as discussed earlier. In case, the Assessee is not contended or aggrieved against the decision of this Tribunal, the remedy de facto does not lie with this Tribunal to redress the grievance of the Assessee but elsewhere. 21. In view of the elaborate discussions as above, I am of the opinion that there is no mistake apparent on record in the order of this Tribunal which can be legally rectified under section 254(2) of the Income-tax Act. Therefore, I am unable to agree with the view taken by the ld. J.M., in the order proposed by him in allowing the M.P. Accordingly, I hold that the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of the case, the non-consideration of the issue of depreciation in respect of windmills installed at Perungudi and Kethanur in the State of Tamil Nadu by the Tribunal is an error within the meaning of Sec. 254(2) of the Income-tax Act, especially when the Tribunal (Bench constituted by very same Members) in the case of Smt. J. Elavarasi v. ACIT in M.P. No. 309 (Mds.)/2004 in IT(SS) A. No. 239 (Mds.)/1997 by an order dated 4-4-2005 held that non-consideration of ground raised in appeal is an error?" As framed by the Accountant Member: "(1) Whether the Tribunal has rightly considered the issue of depreciation on Wind Mills involved in this appeal. (2) Whether there is any error apparent from record in the order of this Tribunal, resulting in entertaining the Miscellaneous Petition filed by the assessee." 2. As regards the framing of questions, there was no consensus between the learned Members. As such Hon'ble President vide order in U.O.F., 13-Cent. Jd(AT)/2005 dated 2-9-2005 directed the Third Member to frame/reframe the questions covering dissent. Accordingly, I perused the questions set out by the ld. Members. I heard the ld. Counsel and the ld. D.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appeals) erred in confirming the above disallowance in principle. 6. The Commissioner of Income-tax (Appeals), has erred in sustaining disallowance of depreciation on windmills by making one-sided addition without going through the available facts and materials, considering only windmills installed at Mandvi, Gujarat State without taking into other installations. 7. The Commissioner of Income-tax (Appeals) has erred in not taking cognizance the order passed by his predecessor for the asst. year 1994-95 based on the same fact and circumstances of the case." 6. Tribunal decided the issue vide para 13A as under: "13A. Coming to the issue of disallowance of depreciation on wind mills, it is stated that the wind mills were installed and commissioned. However, this was not accepted for the reason that investigations showed that no wind mill existed as claimed. The CIT(A) noted that the authorities wanted to inspect all the wind mills for verification of their existence and the assessee vide its letter dated 10-8-1998 had stated that it had no funds to arrange for its executives to travel to Mandvi. It was also stated by means of another communication dated 21-8-1998 that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal should act ex debito justitiae to prevent abuse of process and justice be done. 10. The ld. D.R. submitted that the affidavit is self-serving. It is not supported by any evidence on record. Reliance was placed on the decision of the Apex Court rendered in the case of CIT v. Durga Prasad More [1971] 82 ITR 540 wherein Hon'ble Supreme Court has held that though an apparent statement must be considered as real until it was shown that there were reasons to believe that the apparent was not the real, in a case where a party relied on self-serving recitals in documents, it was for that party to establish the truth of those recitals: the taxing authorities were entitled to look into the surrounding circumstances to find out the reality of such recitals. It was further contended that the assessee cannot be allowed to fill up the lacuna in the evidence by filing an affidavit belatedly at the Third Member stage. He equated the affidavit with additional evidence. It was submitted that fresh evidence cannot be considered by the Third Member. 11. Reference was made to rule 29 of the Income-tax Appellate Tribunal Rules. It was submitted that this rule is not intended to allow the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st such non-consideration of the claim assessee raised a ground being ground No. 6 in the Memorandum of Appeal before the Tribunal. As per affidavit filed by the learned counsel this ground was pressed at the time of hearing. But no finding in this regard was rendered in the order. 14. Ex facie, it appears that due to inadvertence or by oversight the question raised before the Tribunal was not adjudicated upon, as such to do justice it is incumbent on the Tribunal to act ex debito institute, to prevent abuse of process. As there was omission in not considering ground No. 6 raised in the Memorandum of Appeal, there crept an error calling for rectification contemplated under section 254(2) of the Act. I have perused the reasoning adduced by the ld. Judicial Member in his order. I concur with his decision. 15. The matter will now go back to the Regular Bench for deciding the appeal in accordance with the majority. ORDER Per N.R.S. Ganesan, Judicial Member. On a difference of opinion, the matter was referred to the Hon'ble Vice President as Third Member. The Hon'ble Vice President agreed with the views expressed by the Judicial Member. The appeal is posted today for passing ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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