9911796707
TMI Blog2012 (12) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... ale of power generated by windmill. The assessee filed return of income relevant to the assessment year 2005-06 on 12.4.2006 returning total loss of Rs.5,19,150/-. The return of the assessee was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The case of the assessee was selected for scrutiny and notice under section 143(2) was issued on 7.7.2006. The Assessing Officer vide assessment order dated 12.9.2007 made certain additions in the income returned by the assessee. One of the addition made by the Assessing Officer to the tune of Rs. 1,24,09,409/- was on account of disallowance of depreciation on windmill. The Assessing Officer held that the windmill installed by the assessee was not comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had certified that in all the cases service connections have been completed. The counsel for the assessee submitted that any such statement recorded under section 133A has got no evidentiary value and any admission made during such statement cannot by itself be made the basis for addition. In order to support his contention, he relied on the judgement of the Hon'ble Madras High Court in the case of CIT Vs. S.Khader Khan Son, reported as 300 ITR 157. 4. The counsel for the assessee further submitted that the assessee had produced all the relevant documents such as certificate from the Executive Engineer, TNEB dated 5.5.2005 to the effect that the HT supply for the Wind Energy Generator has been effected on 31.3.2005 satisfactorily, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation is allowable for the assessment year 2005-06." The CIT(A) was carried away with the observation of the Assessing Officer in remand report since there was no commercial production made by the appellant and no electricity unit was generated as on 31.3.2005, therefore, it cannot be said that unit was commissioned on 31.3.2005. 5. On the other hand, Dr.S.Moharana appearing on behalf of the Revenue submitted that since all the documents were executed in March, 2005 and all the agreements and certificates were signed on a single day i.e. 31st March, 2005 had raised suspicion on the genuineness of the documents. The meter reading for a particular period does not show usage of windmill on 31.3.2005. The statement at page 34 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a statement showing energy generated by the windmill between 31.3.2005 and 12.4.2005 and a certificate issued by the Executive Engineer (O&M), Udumelpet at page 35 of the paper book stating that as per the records windmill has generated 400 units during the period from 31.3.2005 to 12.4.2005. An agreement for the supply of power executed between TNEB and the assessee on 31.3.2005 is at page 75 to 82 of the paper book. The counsel for the assessee has also pointed out that as per the terms and conditions of the agreement between the assessee and the vendor of the windmill i.e. M/s. NEG Micon (India) Pvt. Ltd. at page 64 to 74 of the paper book, the entire amount of Rs. 11.02 lakhs being full payment for erection and commissioning of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed or not. In our considered opinion that would amount to 'used' because wear and tear in the plant & machinery would start from the day when plant and machinery is used in trial production. We also find that the lower authorities have not reached any clear conclusion as to when the plant & machinery was put to use for trial production. Therefore, we set aside the order of the learned CIT(A) and restore the matter back to the file of the Assessing Officer with a direction to find out when the trial production commenced. We make it clear that depreciation should be allowed if the plant & machinery has been put to use for trial production. Needless to say that the assessee should be given adequate opportunity to represent its case." In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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