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TMI Blog2018 (1) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance of depreciation of Rs. 17200000/- on the windmill at Village Nu despite the windmill having been installed only and not having started actual power generation. ii) Whether in the facts and circumstances of the case the ITAT was justified in law in confirming the order of the CIT(A) in respect the disallowance of depreciation of Rs. 13955850/- on the windmill at Village Akal. iii) Whether depreciation is allowable only when the windmill actually starts commercial power generation rather than when it is only ready for power generation. iv) Whether in the facts and circumstances of the case the ITAT was justified in law in allowing depreciation when the finding of the Assessing Officer was that the assets were not been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to use for the purposes of business of the assessee, the depreciation allowance is not to be granted. This view is fortified by a decision of the Gujarat High Court in the case of CIT v. Suhrid Geigy Ltd. [1982] 133 ITR 884. Inviting our attention to the following words of clause (vi) : "in respect of the previous year in which the ship or aircraft is acquired or the machinery or plant is installed, or if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year," In this context our attention was invited to some decisions. CIT v. Viswanath Bhaskar Sathe[1937] 5 ITR 621. This is a Bombay High Court decision taking a view that the word "use" in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 and only 5.2 units have been sporadically generated on 31.03.2010, it does not appear to me that the 5.2 units of electricity were generated during the course of a successful trial run (on 31.03.2010). From the facts of electricity generated by this windmill, it appears to me that the trial run was not successful on 31.03.2010 since no electricity could be generated in April 2010 and only a meager amount of electricity wa possible to have been recorded on 31.03.2010. Therefore, it is held that this windmill was not ready for use on 31.03.2010, for if it were so, it would have generated electricity in the month of April, 2010. In view of the above discussion, it is held that this windmill at Village-Nu, was not put to use in this previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation amounting to Rs. 1,72,00,000/- with regard to windmill at NU Unit by observing as under:- "3.5 In this case, both the windmills at Village- Akar and NU have been commissioned on 31.03.2010. As regards the windmill at village- UN, it is seen that this windmill has generated only 5.2 units of electricity on 31.03.2010 and thereafter, no electricity has been generated in the month of April, 2010. Therefore in the month of May, 2010; 78,089 units were generated, in the month of June, 2010; 73,950 units were generated and so on. Since, no generation of electricity has taken placed in April, 2010 and only 5.2 units have been sporadically generated on 31.03.2010, it does not appear to me that the 5.2 units of electricity were generate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 Feb 2011 March 2011 April 2011 5.2 Kwh 0 780089.44 73950.24 54490.8 65867.36 48250.8 63112.4 51185.68 73237.84 81712.8 72664.8 92107.6 94260.4 Hence, it is noted from the certificate of AEN, AVVNL that the wind mills was put to use in the month of March, 2010 and it has generated electricity of 5.2 Kwh. Thus it shows that the assets of thw wind mill at NU Unit was put to use by the assessee for the purpose of business. Hence, the documents produced by the assessee from the AEN, AVVL and the details of the generation of electricity that wind mill at NU Unit was had generated the power on 31.03.2010 proves that wind mill at NU unit was put to use. Thus in view of the above facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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