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TMI Blog2012 (9) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on tankers amounting to ₹ 1,24,614/- 5. The first issue raised in this appeal relates to the deletion of disallowance of depreciation on dumpers. The facts relating to this issue in brief are that the assessee filed the return on 29.7.2006 declaring an income of ₹ 22,55,136/- which was processed on 22.2.2007 u/s 143(1) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" in short"]. Thereafter, the case was selected for scrutiny. The assessee claimed the depreciation @ 30% on the dumpers. The Assessing Officer was of the view that the depreciation was allowable @ 15%. When asked to justify the same, the assessee submitted that the dumpers were given on hire to M/s Shree Logistics P. Ltd and were registered under the Motor Vehicle Act so were entitled for depreciation @ 30%. The Assessing Officer did not find merit in the submissions of the assessee and held that the dumpers on which the assessee had claimed depreciation were not transport vehicles, rather those were construction equipments falling in the general category of plant and machinery and hence were entitled for depreciation @ 15%. Reliance was placed on the following case laws:- a) CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Another issue agitated by the Department relates to the disallowance of depreciation on tankers. The facts relating to this issue in brief are that the Assessing Officer had made disallowance by observing in para 4 of the assessment order dated 31.12.2008, which reads as under:- "During the assessment proceedings for Assessment Year 2004-05, it was found that the assessee received a discount of ₹ 11,01,000/- on purchase of tankers. This discount was not accounted for by the assessee in the books of account and hence vide order u/s 143(3) dated 12.12.2006 read with order u/s 154 dated 15.2.2007 depreciation amounting to ₹ 4,09,200/- claimed on such inflated cost was disallowed. As a corollary to the above fact, the opening WDV of tankers as on 1.4.2005 stands inflated by an amount of ₹ 4,15,380/- (6,91,800 - 2,76,720). Therefore, the depreciation @40% on this inflated WDV of ₹ 6,91,800/- which amount of ₹ 1,24,614/- is disallowed and added back to the income of the assessee." 11. When the assessee carried the matter to the ld CIT(A), the issue was decided in favour of the assessee by observing in para 6 of the impugned order, which reads as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lock of assets and right course was to allow correct depreciation thereon. The Id. CIT(A), however, further exceeded his jurisdiction in holding that there could be no disallowance of depreciation amounting to ₹ 4,09,200/- on the amount of ₹ 11,01,000/- as aforesaid, as a separate addition stands made by the Assessing Authority. However, perusal of the assessment order reveals that such disallowance of depreciation was made by the Assessing Officer in the order impugned before him. The disallowance of depreciation appears to have been made by the Assessing authority in a separate order passed on 15.01.2007 on the application ol assessee requiring him to do so. The order passed u/s 154 of the Act is an order. When that order was not under appeal before him, he could not have adjudicated on the issue and deleted the disallowance of depreciation, as the same did not occasion in the assessment order dated 12.12.2006 impugned before him. The Id. CIT(A) for the reasons best known to him appears to have transgressed his powers and adjudicated upon the issue, which was not the subject matter of appeal. We, therefore, set aside the order on that ground and allow the ground rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this issue is remanded back to the file of Assessing Officer. 19. The last issue in this appeal relates to deletion of disallowance for depreciation on windmill. The facts relating to this issue in brief are that the Assessing Officer during the course of assessment proceedings noted that the assessee claimed 80% depreciation on Civil work and foundation, electric items, components and installation and depreciation on Common power evacuation charges treating the same as part of the windmill. The Assessing Officer was of the view that civil work and foundation, electric items, components & installation and depreciation on common power evacuation charges shall not qualify for higher depreciation. The Assessing Officer allowed depreciation @ 10% on civil work & foundation and @ 15% on electric items, components & installation and did not allow any depreciation on common power evacuation charges. Accordingly disallowance of ₹ 34,82,233/- was made by giving the working as under:- Item Cost Eligible rate of depreciation Depreciation claimed @ 80% Depreciation allowable Difference Civil work & foundation 3460760 10% 1384304 173038 1211266 Electrical items, component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Mills Ltad (2007) 289 ITR 261 (P&H) 22. The ld CIT(A) after considering the submissions of the assessee observed that the assessee had got installed windmill through M/s Suzlon Energy Limited and had claimed depreciation @ 80% which was allowable as per the provisions of the Act. The ld CIT(A) was of the view that Civil work & foundation, electric items and components installed and common power evacuation were integral part of the windmill because without stone foundation, windmill cannot be installed. Similarly the assessee incurred expenditure for electric items, components and installation in order to get windmill installed on the basis of specifications / suggestions given by the company who had installed the windmill, so it was an integral part of the windmill. The CIT(A) also observed that the Assessing Officer disallowed the depreciation claimed on the plea that common power evacuation expenses amounting to ₹ 31,25,000/- paid to M/s Suzlon Energy Limited through which the windmill was installed were non-refundable and as per the detail, the assessee did not acquire any asset by incurring the above expenses on which it could claim the depreciation. The ld CIT(A) was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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