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TMI Blog2016 (6) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... ased depreciation in the subsequent years as a consequential impact - Decided partly in favour of assessee for statistical purposes. Enhanced depreciation rate of 80% on Genset - Held that:- We find that the issue in dispute is squarely covered by the decision of the Hon’ble Rajasthan High court in the case of Agarwal Transformers Pvt. Ltd [ 2002 (2) TMI 34 - RAJASTHAN High Court ] wherein it was held that electric generator clearly falls under renewal energy device and thereby eligible for enhanced rate of depreciation. - Decided in favour of assessee - I.T.A No.2413/Kol/2013 - - - Dated:- 1-6-2016 - Shri N. V. Vasudevan, JM Shri M. Balaganesh, AM For The Appellant : Shri K.K.Chhaparia, FCA Nirav Seth, ACA For The Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n irrespective of such plant and machinery being engaged in manufacture or production of goods as long as assessee per se is engaged in the business of manufacture of own article. It was claimed that admittedly, assessee is engaged in the manufacture of apparels and it does not matter where the new plant and machinery is installed i.e. in sales outlet. But Ld. CIT(A) invoked first proviso to section 32(1)(iia) of the Act and held new plant and machinery installed in other than manufacturing location and not utilized in manufacture of article is not eligible for additional depreciation. However, he granted relief to the assessee to the extent of ₹ 40,23,340/- being plant and machinery installed at the factory premises and upheld the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nery which should have any operational connectivity to the article or thing that was already being manufactured by the assessee. 2.4. In response to this, Ld. DR argued that the assessee s case falls in the first proviso to section 32(1)(iia) of the Act wherein plant and machinery was installed in the sales outlet i.e. the office premises. In both the case laws relied on by the Ld. AR, assessee therein were engaged in the manufacture of article and windmills were installed which was engaged in the business of generation of power. Hence, it was put to use operationally and both the units were engaged in manufacturing activity, whereas in the instant case, the new machinery was installed only in the sales outlet which is not used for any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2.6. We find that installation of new plant and machinery in sales outlet/retail office would fall under clause (B) of proviso to section 32(1)(iia) of the Act. We are in complete agreement with the arguments advanced by the Ld. DR. Needless to mention that the assessee is entitled for the benefit of having its written down value increased due to additional depreciation getting disallowed. The Ld. AO is directed to rework the written down value accordingly and give benefit of increased depreciation in the subsequent years as a consequential impact. Accordingly, ground nos. 1 and 2 raised by the assessee are partly allowed for statistical purposes. 3. The next issue to be decided in this appeal is as to whether the assessee is enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in confirming the action of the AO. 3.2. The Ld. AR apart from reiterating the submissions as made before the lower authorities, relied on the decision of Hon ble Rajasthan High Court in the case of CIT Vs. Agarwal Transformers Pvt. Ltd. reported in 258 ITR 251 (Raj) wherein it was held that electric generator clearly falls under renewal energy device and thereby eligible for enhanced rate of depreciation. In response to this, the Ld. DR argued that electric generator is run on diesel and hence not renewable energy device. He argued that renewable energy is generally defined as energy that is collected from resources which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is different from pumps run on wind energy, which falls within the renewable energy devices. Thus, it is erroneous to say that the condition 'run on wind energy' is also attached to electric generators. Even grammatically neither, nor the word 'both' is used after the word 'pumps' in the relevant entry and this also clarifies that the condition 'running on' wind 'energy' is only attached to the word 'pumps' and not to the electric generators. A further reading of the entry shows that it is inclusive, it refers to two different items namely, electric generators and secondly the pumps running on wind energy. Thus, in our view the electric generator clearly fails under the renewable energy dev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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