9911796707
TMI Blog2017 (5) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... in nature needing no adjudication. 3. Vide its ground No.2 & 6, Revenue grievance is that ld. Commissioner of Income Tax (Appeals) directed ld. Assessing Officer to allow depreciation on Windmills at full rate of 80% despite the windmills having been used for business purpose only after 30th September, 2010. 4. Facts apropos are that assessees engaged in jewellery business had filed its returns for the impugned assessment year disclosing income of D10,07,43,384/- and D11,54,42,940/- respectively. During the course of assessment proceedings, it was noted by the ld. Assessing Officer that assessee had claimed depreciation on windmills. Claim of depreciation in respect of first assessee was on a windmill cost of D7,10,00,000/-, and in resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of 80% and made disallowances. 5. Aggrieved the assessees moved in appeal before ld. Commissioner of Income Tax (Appeals). Ld. Commissioner of Income Tax (Appeals) held that windmills were connected to electricity grid on 17.07.2010 and power purchase agreements with KSEB were signed on 30.09.2010. According to him, windmills where thus ready for use and had already started generating electricity prior to 30.09.2010. He thus, held that assessees had put the windmills to use for a period more than 180 days and hence eligible for full depreciation. 6. Now before us, ld. Departmental Representative strongly assailing the order of the ld. Commissioner of Income Tax (Appeals) submitted that date of start of commercial production alone cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduction. Even otherwise in the case of electricity, whether generated during trial period or generated after trial run, the product remained very same. In the circumstances, we are of the opinion that the ld. Commissioner of Income Tax (Appeals) was justified in taking a view that the windmills were put to use for a period more than 180 days during the relevant previous year and allowing the full claim of depreciation. We do not find any reason to interfere with the orders of the ld. Commissioner of Income Tax (Appeals). Ground 2 & 6 of the Revenue stand dismissed. 9. Vide its ground 3, 4, 5 & 7, Revenue is aggrieved that electrical installation for the windmill and cost of civil works for windmill were considered as part of the cost of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... looms vs. DCIT (ITA No.2291/Mds/2008, dated 20.11.2009) and correctly held that civil works and electrical installation of the windmills were eligible for depreciation at the rate provided for windmills. 12. We have considered the rival contentions and perused the orders of the authorities below. Ld. Assessing Officer while holding that civil works and electrical installation of the windmills could not be given depreciation rate specified for the windmills in new appendix I, had relied on the Pune Bench in the case of Poonawala Finvest & Agro (P) Ltd (supra) . However, ld. Commissioner of Income Tax (Appeals) had chosen to follow the decision of Co-ordinate Bench in the case of M/s. Asian Handlooms (supra) wherein it was held as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll these are necessary inputs going into ultimate cost of such wind mill. The foundation structure or the specially demarcated appurtenant thereto cannot be considered as equivalent to a hotel or a cinema building which is adjunct to carrying on a hotel business or theatre business. On the other hand these can be deemed only a part of a windmill for harnessing wind energy. In coming to this conclusion we are fortified by decision of Hon'ble Karnataka High Court in the case of CIT v Kamataka Power Corporation (247 ITR 268) where it was held that whether the building can be treated as a plant or not. it was a question of fact and when it is found as a fact that the building has been so planned and constructed as to serve the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the Assessing Officer. Therefore, disallowance of Rs. 1,17,00,000/- 13 lakhs, Rs. 23,51,576/- and Rs. 5,73,824/- on account of depreciation claim stands cancelled. Ground Nos. 5 to 19 of the assessee stands allowed." Even if we consider that Pune Bench had taken a different view with regard to depreciation rates applicable for civil works and electrical installation of windmills, we cannot find fault with ld. Commissioner of Income Tax (Appeals) following the decision of a Co-ordinate Bench which went in favor of the assessee. That apart, the judgment of jurisdictional High Court in the case of Popular Borewell Service and Others (supra) relied on by the ld. Departmental Representative was in relation to drilling rigs, air compress ..... X X X X Extracts X X X X X X X X Extracts X X X X
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