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TMI Blog2018 (5) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... owance. - Decided against assessee Recomputation of book profit u/s.115JB by restricting the claim of depreciation on windmills to 5.28% as against 80% reckoned by the assessee - Held that:- Unless an assessee can show that depreciation was provided, by spreading 95% of the original cost, on the specified period, a claim in excess of what is set out in Schedule XIV of the Companies Act, 1956 cannot be allowed. We are therefore of the opinion that lower authorities were justified in recalculating the profit for the purpose of applying Section 115JB of the Act. We do not find any reason to interfere with the orders of the lower authorities. - Decided against assessee - I.T.A. No.1348/CHNY/2017 - - - Dated:- 3-5-2018 - SHRI N.R.S. GANESA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax (Appeals) specifically mentioned that assessee was at liberty to make a claim u/s.43B of the Act in the year when the interest were actually paid. 5. Now before us, the ld. AR strongly assailing the orders of the lower authorities submitted that interest on loans taken on the basis of keyman insurance policies would not fall u/s.43B of the Act. 6. Per contra, ld. Departmental Representative strongly supported the order of the ld. Commissioner of Income Tax (Appeals). 7. We have considered the rival contentions and perused the orders of the authorities below. Section 43B(d) of the Act which is apposite is reproduced hereunder:- Section 43B Notwithstanding anything contained in any other provision of this Act, a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 9. Ld. Counsel for the assessee submitted that assessee had charged depreciation for wind mills at 80%. As per the ld. Authorized Representative, though the rate prescribed under Schedule XIV of the Companies Act, 1956 was only 5.28%, assessee was well within its right to charge depreciation at a higher rate. As per the ld. Authorized Representative, the wind mills had not performed to the level expected and therefore assessee was constrained to charge depreciation, above the rate prescribed under Companies Act. Contention of the ld. Authorised Representative was that ld. Assessing Officer as well as ld. Commissioner of Income Tax (Appeals) did not appreciate the argument of the assessee that rate of depreciation given in Sched ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in section 350 ; or ( b) in respect of each item of depreciable asset, for such an amount as is referred at by dividing ninety-five per cent of the original cost thereof to the company by the specified period in respect of such asset ; or ( c) on any other basis approved by the Central Government which has the effect of writing off by way of depreciation ninety-five per cent. of the original cost to the company of each such depreciable asset on the expiry of the specified period ; or ( d) as regards any other depreciable asset for which no rate of depreciation has been laid down by this Act or any rules made thereunder, on such basis as may be approved by the Central Government by any special order in any par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e written-down value of such asset over its saleproceeds or as the case may be, its scrap value, shall be written off in the financial year in which the asset is sold, discarded, demolished or destroyed . A reading of the two sections clearly indicate that assessee can provide depreciation either at the rates mentioned in Schedule XIV or by following a method specified in clause (b) (c) or (d) of Sub Section (2) of Section 205 of the Companies Act, 1956. Now the claim of the assessee, it seems, is that it had provided higher rate of depreciation on windmills, in accordance with such clause (b) of Subsection(2) to Section 205 of the Companies Act, 1956. For this assessee is relying on notes forming a part of its audited financial state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what was specified in the said Schedule. Coming to the decision of Co-ordinate Bench in the case of Indowind Energy Ltd, relied on by the ld. Authorised Representative, it is clearly mentioned at para 14.2 of the said order, that the claim of the concerned assessee was based on realistic facts. Be that as it may, unless an assessee can show that depreciation was provided, by spreading 95% of the original cost, on the specified period, a claim in excess of what is set out in Schedule XIV of the Companies Act, 1956 cannot be allowed. We are therefore of the opinion that lower authorities were justified in recalculating the profit for the purpose of applying Section 115JB of the Act. We do not find any reason to interfere with the orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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