9911796707
TMI Blog2022 (4) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act on 22.03.2016. The grounds taken by the Revenue read as under: 1. The order of the Id. CIT(A), Coimbatore is against the facts and circumstances of the case and is erroneous by law. 2. The learned CIT(A) erred in allowing the assessee's appeal on the issue of disallowance of additional depreciation fortheAsst. Year 2010-11. 3. The learned CIT(A) failed to consider that the CIT(A) vide his order in 146/14- 15 dated 29.04.2016 for the Asst. year 2011-12 dismissed the assessee's appeal on a similar issue by distinguishing the facts of the High Court's decision in the case of CIT vs. VTM cited in 319 ITR 336 with that of the assessee's case. 4. It is submitted that the order of CIT(A) for the Asst. year 2011-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec. 32(1)(iia), submitted that in the case of any new machinery or plant which has been acquired or installed after 31.03.2005, by an assessee engaged in the business of generation and distribution of power, a further sum equal to 20% of actual cost of such machinery or plant shall be allowed as deduction. The assessee placed reliance on the decision of Hon'ble High Court of Madras in CIT V/s Texmo Precision Castings (321 ITR 481); CIT V/s VTM Ltd. (187 Taxman 319); CIT V/s Hi Tech Arai Ltd. (321 ITR 477) and the decision of Chennai Tribunal in ACIT V/s M. Satishkumar (33 Taxmann.com 396). The assessee thus submitted that the plant and machinery relating to power generation unit would be eligible for additional depreciation u/s 32(1)(iia). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the power sector Section 32(1)(iia) provides for allowance of initial depreciation (in addition to normal depreciation) at the rate of 20% of the actual cost on new machinery or plant (other than ships and aircraft) to the assessee engaged in the business of manufacture or production of any article or thing in the year of acquisition and instalment. Under the existing provisions, the benefit of initial depreciation is not available on the new machinery or plant installed by an assessee engaged in the business of generation or generation and distribution of power. In order to encourage new investment by the assessees engaged in the business of generation or generation and distribution of power, it is proposed to amend this section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly shows that generation of electricity is akin to manufacturing of a new product. In the instant case, electricity which may not be seen with the eyes, however, its effect can be seen and felt. The electricity can be transmitted, transferred, delivered, stored, possessed, etc. The hon'ble Supreme Court in the case of the Madhya Pradesh Electricity Board, (supra) has held that electricity falls within the definition of goods under the provisions of Sale of Goods Act, 1930. The Delhi Bench of the Tribunal in the case of National Thermal Power Corporation Ltd. (supra) after a detailed examination of several judgments, Acts, Constitution of India, has concluded that the process of generation of electricity is akin to manufacture of an ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court of Calcutta which is reported at 134 Taxmann.com 63. 7. The revenue has relied upon the decision of coordinate bench of Tribunal in assessee's own case for AY 2011-12, ITA Nos.319/Mds/2015 & ors. Order dated 10.07.2017 which has taken a view against the assessee by observing as under: - 7. Assessee's Appeal in ITA No.2468/Mds/2016, Assessment Year 2011-12 A) Ground-3(i) :- Disallowance of additional depreciation U/s. 32(1)(iia) of the Act for Rs. 55,33,000/-:- During the course of scrutiny assessment proceedings, it was observed by the Ld.AO that the assessee had claimed additional depreciation on windmill. The Ld.AO disallowed the claim of additional depreciation because the business of generation, transmission or distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 32(1)(iia) of the Act, by the Finance Act, 2012 w.e.f. 01.04.2013 i.e., from the assessment year 2013-14. Another finding as rendered by the bench is that it is not the case of the assessee that the assessee is claiming the additional depreciation with respect to its manufacturing activities. 8. We find that so far as the first finding is concerned, the same is not in accordance with the cited decisions of Hon'ble High Court of Madras. However, the second finding is vital one and the same would require concrete findings by the lower authorities. It has been observed by the bench that it is not the case of the assessee that the assessee is claiming the additional depreciation with respect to its manufacturing activities. If this finding i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
