9911796707
TMI Blog2020 (3) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... the binding precedent of Hon'ble Jurisdictional High Court the case of CIT vs K.K. Enterprises [ 2015 (2) TMI 508 - RAJASTHAN HIGH COURT] we decide the issue in favour of the assessee and thereby the addition made by the AO on account of disallowance of depreciation is delete. Addition on account of interest on Fixed Deposits during pre-commencement period as income from other sources - HELD THAT:- If the fixed deposits were made to avail the bank guarantee for setting up of the solar power plant then it is inextricably linked with the setting of solar power plant and consequently the interest on said fixed deposits would be in the nature of capital receipt and not the Revenue receipt. Following the judgement of Hon'ble Delhi High Court in the case of Pr. CIT vs Facor Power Ltd. [ 2016 (1) TMI 461 - DELHI HIGH COURT] we decide this issue in favour of the assessee and against the Revenue. Thus the addition made by the AO is deleted. The Ground of the assessee is allowed. - ITA No. 313/JP/2019 - - - Dated:- 2-3-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Akhilesh Kumar Jain, CA For the Revenue : Smt. Runi Paul, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the cost of civil engineering works would be part of cost of installation of solar plant as it is necessary to facilitate the fixing of solar power panels to earth and other electrical fittings forming part of the solar power plant. The ld.AR further submitted that the civil engineering works is carried out specifically for installation of the solar power plant and it has no other purpose than generation of solar power. The ld.AR thus submitted that the cost of civil engineering works would be part of the cost of installation of solar power plant and therefore, eligible for depreciation as applicable on the solar power plant and not on building as applied by the AO. In support of his contentions, the ld.AR of the assessee relied on the decision of Hon'ble Jurisdictional High Court in the case of CIT vs K.K. Enterprises [2014] 227 Taxman (Magz) 181 (Raj.). The ld.AR of the assessee submitted that Hon'ble Jurisdictional High Court has reiterated its view in the case of CIT vs Mehru Electricals Mechanical Engineers (P) Ltd. [2016] 388 ITR 169 (Raj.). Thus in view of the judgement of Hon'ble Jurisdictional High Court in the case of CIT vs K.K. Enterprises (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll would require a scientifically designed machinery in order to harness the wind energy to the maximum potential. Such device has to be fitted and mounted on a civil construction, equipped with electric fittings in order to transmit the electricity so generated. Such civil structure and electric fittings, therefore, it can be well imagined, would be highly specialized. Thus, such civil construction and electric fitting would have no use other than for the purpose of functioning of the windmill. On the other hand, it can be easily imagined that windmill cannot function without appropriate installation and electrification. In other words, the installation of windmill and the civil structure and the electric fittings are so closely interconnected and linked as to form the common plant. As already noted, the legislature has provided for higher rate of depreciation of 80 per cent on renewable energy devises including windmill and any specially designed devise, which runs on windmill. The civil structure and the electric fitting, equipments are part and parcel of the windmill and cannot be separated from the same. The assessees claim for higher depreciation on such investment was, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Indian Overseas Bank. Thus the fixed deposits were made to avail the bank guarantee to be provided to IREDA for getting license of solar power plant. Therefore, the ld.AR of the assessee contended that fixed deposits are inextricably linked with setting up of solar power plant. Thus the interest earned during pre-operative period would go to reduce the cost of project. Similar contentions were raised by the assessee before the ld. CIT(A) alongwith various decisions on this point. However, the ld. CIT(A) without dealing with the decisions on the point has upheld the addition made by the AO. The Hon'ble Delhi High Court in the case of Pr. CIT vs Facor Power Plant (supra) after considering the decision of Hon'ble Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1997] 227 ITR 172(SC) has held in para 11 to 13 as under:- 11. From the above extract, it is evident that the test that is required to be employed is whether the activity which is taken up for setting up of the business and the funds which are garnered are inextricably connected to the setting up of the same. In the present case, findings of fact have been returned by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
