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TMI Blog2012 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... same is current repairs and allowed as revenue expenditure - Decided against the Revenue. Depreciation on wind mills - dis-allowance on ground that actual commissioning of the windmill took place only after the relevant accounting period - Held that:- Considering the fact that the department itself had not questioned the State Electricity Board's certificate that the wind mill was commissioned during the year under consideration, being a factual finding, question is decided against Revenue. Deduction u/s 80HH - inclusion of profit margin of goods captively consumed - Held that:- Since the items were transferred from one unit to another by the same company, hence, the assessee could not make profit from itself. Therefore, the profit m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that the profit margin of goods captively consumed is to be excluded for the purpose of deduction under Section 80HH? (iv) Whether in the facts and circumstances of the case, the Tribunal was right in allowing depreciation on the windmills when the actual commissioning of the windmill took place only after the end of the relevant accounting period?" 2. Although notice was served on the respondent, there is no appearance in person or through the counsel. As such, after hearing learned standing counsel for the Revenue and on going through the records, present order is passed. 3. The assessee herein is engaged in the manufacture of metal powder. In the return filed by the assessee for the assessment year 1994-95, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 304 Shell is concerned, the Income Tax Officer pointed out that the assessee got this fabricated and packed with refractories, bricks etc. The Commissioner of Income Tax (Appeals) held that the assessee had replaced the machines purchased from outside parties and they being independent machinery, they could not be regarded as revenue expenditure. Thus, a sum of Rs.11,04,654/- plus Rs.5,52,750/- was confirmed. 5. As regards the other machineries, the Commissioner of Income Tax (Appeals) however agreed with the assessee that they were revenue expenditure. As regards the disallowance of claim in depreciation of wind mill, the Electricity Board certified that the wind mills were put on use on 31.3.1994, thus the Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill was commissioned. As regards the replacement of certain machinery, considered as revenue expenditure, the Tribunal confirmed the order of the Commissioner of Income Tax (Appeals) and hence the present appeal. 8. As far as the claim on depreciation on wind mill is concerned, considering the fact that the department itself had not questioned the State Electricity Board's certificate that the wind mill was commissioned during the year under consideration, being a factual finding, we have no hesitation in rejecting the Revenue's appeal. Consequently, the fourth question is answered against the Revenue. 9. As regards the inclusion of profit margin of goods captively consumed, herein too, the Tribunal considered in the assessee's appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 228 - CIT v. RAVINDRANATHAN NAIR , we have no hesitation in applying the said decision to sundry sales. The sundry sales being part of the gross total income as profit of the business, the same has to be included in the total turnover. Thus, applying the decision of the Apex Court referred to above, as far as sundry sales are concerned, we answer the question in favour of the Revenue and that the sundry sales form part of the turnover for the purpose of deduction under Section 80HHC. 12. This leaves us with one question to consider as regards the amount spent on replacement of independent machinery. Except for a general question raised that the Tribunal was not correct in allowing the deduction of the amounts spent on replacement of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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