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TMI Blog2019 (12) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (in appeal No.PN/CIT(A)-4/638/2014-15/106) granted partial relief to the assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds : "1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) has erred in allowing the expenditure on account of discount given to dealers by ignoring the fact that the assessee has inflated expenditure on account of accelerated discount to adjust the profit, without having any fixed policy or consistency. 2. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) has erred in allowing the disallowance of late delivery charges as the assessee has defaulted in not adhering to the terms and conditions of agreement and delivering orders in time. 3. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals) has erred in allowing depreciation on civil work and electrical installation @ 80% instead of 10% and 15% respectively." 3. First ground is with respect to deleting the addition on account of disallowance of discount given to dealers. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the order of Ld.CIT(A) for A.Ys. 2010-11 and 2011-12, the issue was carried before the Tribunal in A.Ys. 2010-11 and 2011-12 and the Coordinate Bench of the Tribunal has upheld the order of Ld.CIT(A) vide its order dated 24.10.2017 (supra) by observing as under : "24. We have heard the rival contentions and perused the record. The assessee for the year under consideration in addition to other businesses carried on by it has also carried on the business of manufacture and sale of couplings. The said item manufactured by the assessee is consumable item, which is utilized in different fields, industries and in order to sell its goods, the assessee had established a distribution network. The assessee was operating in very highly competitive field, where the life cycle of the product which was manufactured by the assessee, was between one to three years. In other words, the manufactured items had to be sold as quickly as it was manufactured. So to boost its sales, the assessee had a distribution policy in place, which was applicable to all the distributors all over India which were engaged in selling couplings. The role of the distributors was not only to sell the goods but to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT Vs. Walchand & Co. Pvt. Ltd. (supra). Accordingly, we find no merit in the order of Assessing Officer in this regard. Upholding the order of CIT(A), we dismiss the ground of appeal No.2 in assessment years 2010-11 and 2011-12 raised by the Revenue." Before us, Revenue has not pointed out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years and nor has pointed out any fallacy in the findings of Ld.CIT(A). We therefore find no reason to interfere with the order of Ld.CIT(A). Thus, the ground of the Revenue is dismissed. 6. 2nd ground is with respect to deleting the disallowance of late delivery charges. 6.1. During the course of assessment proceedings, AO noticed that assessee had claimed Rs. 3,02,411/- on account of late delivery charges. It was assessee's submission that the amount was on account of non-delivering the orders within the time agreed with the parties. AO was of the view that the amount was not eligible for deduction u/s 37(1) of the Act. He accordingly made its addition. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who decided the issue in favour of the assessee by obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed. 9. 3rd ground is with respect to deleting the disallowance of depreciation. 9.1 AO on perusing the Profit and Loss account noticed that assessee had claimed depreciation of Rs. 46,168/- on windmill at 80% as it was commissioned on 09.08.2007. On perusing the details of the break-up statement, AO noticed that high rate of depreciation was also claimed on civil work and installation of electrical lines. AO was of the view that the civil work and installation of electrical lines cannot be considered to be part of the windmill. He accordingly worked out the excess depreciation to the extent of Rs. 4,626/- and disallowed the same. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who granted partial relief to the assessee by noting as under : "5.3 DECISION : I have perused the assessment order and the submission made by the appellant as above carefully. The appellant in the written submission submitted that on the similar issue for AY 2009- 10, AY 2010-11 and AY 2011-12, in case of depreciation on Electrical line for transmission of power generate, the Hon'ble CIT (A)-4, Pune vide order dated 03/03/2015 had decided the issue in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation at the rate applicable to renewable energy device/windmill. Keeping in view the decisions of the jurisdictional ITAT and High Court cited supra, it is held that the appellant was entitled to higher depreciation @80% only on cost of reinforced cement foundation and labour charges incurred for erection and commissioning of windmill since they form integral part of the wind mills. However any expenditure incurred on civil work, construction of control room, site development including temporary approach roads, internal lines, sensing or such structures surrounding the wind mills that cannot be said to be integral part of the wind mills would not be entitled to depreciation of the higher rate of 80% and such depreciation would only be allowed @ 10%. Keeping in view the decisions of the jurisdictional ITAT cited supra, it is held that the appellant was entitled to higher depreciation on the electrical line for transmission of the power generated. The Assessing Officer is directed to call for the breakup of each of these items of expenditure and allow accelerated depreciation on the items mentioned supra. Ground no.2 for A. Ys. 2009-10 & 2010-11 & Ground no.1 for A. Y. 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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