9911796707
TMI Blog2024 (12) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... such, is dismissed against the Revenue and in favour of the Assessee. - HON'BLE MR JUSTICE V KAMESWAR RAO AND HON'BLE MR JUSTICE S RACHAIAH For the Appellants (By Sri. M Dilip, Advocate For Sri. Ravi Raj Y V, Advocate). For the Respondent (By Sri. Rajeev Channappa Nulvi And Smt. Jinita Chatterjee, Advocates). ORAL JUDGMENT (PER: HON'BLE MR JUSTICE V KAMESWAR RAO) The challenge in this appeal is to an order dated 27.01.2022 passed by the Income Tax Appellate Tribunal B Bench, Bengaluru ( ITAT for short) in ITA No.2104/Bang/2017. It may be stated here, vide the said order, ITAT has disposed of two cross-appeals against the order of the Commissioner of Income Tax (Appeals) [ CIT (A) for short]. 2. The appeal was admitted on 26.06.2023 on the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case and law, the Tribunal is right in law in allowing depreciation on solar plant for Rs. 20,27,43,229/- by holding that the asset was put to use during the relevant financial year when conditions for claiming depreciation as prescribed in Section 32 are not satisfied by assessee for financial period 2012-13 and when approval for setup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hronization of the solar plant with the grid. On 20.06.2013, the respondent signed the power purchase agreement for supply of power to the consumer Dr. Reddy s Laboratories and bills were raised as per the agreement. 5. The Assessing Officer proceeded to hold that the respondent-Assessee has put the plant to use only on the date of synchronization of the solar plant with the grid i.e., 22.04.2013. This conclusion of the Assessing Officer was primarily on the basis of letters dated 19.03.2015 and 27.04.2014. 6. Whereas, the CIT (A) was of the view that the solar plant was completed and approved by the Chief Electrical Inspector, Government of Andhra Pradesh on 30.03.2013. The respondent was also generating solar power from 20.03.2013 and it was being supplied to the workers colony, locally from 30.03.2013 to 22.04.2013 when the power purchase agreement was signed and supply of solar power to the purchaser through the grid was entered into. Submissions: 7. Sri. Dilip.M, learned counsel for the appellant- Revenue states, the Tribunal has erred in allowing depreciation on solar plant for Rs. 20,27,43,229/- by holding that the asset was put to use when conditions for claiming depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... synchronization took place with the grid, in the financial year 2013-14. 10. As stated above, the CIT (A) in paragraphs No.6.9 to 6.12, has held as under: 6.9 In my view, the date of synchronisation of the Solar Plant with the grid cannot be regarded as the date on which the Solar Plant is put to use, for the simple reason that an asset could be regarded as being put to use when it used by the assessee for purpose of business. Thus, the date on which the Solar Plant starts generation of electricity will be the date of which the asset has been put to use and not when it supplied electricity to the grid. The reason for this conclusion is quite simple. As has been clarified by the Electricity Authorities, the synchronisation of solar plant to the grid means operation of the Solar Plant in exact coordination with time or rate with the grid and this is required to supply electricity through the grid. However, in case the appellant does not want to supply electricity to the grid, there would be no reason or occasion to connect the Solar Plant to the grid at all and hence, the connection to the grid is not determinative of the matter. Captive power plants are not unknown and the true tes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is ready and generated the power, but unable to evacuate the power due to non-receiving CEIG approval in time i.e., on 20.03.2013 and pending of line work. Later on got the CEIG approval on 30.03.2013, entire line work was completed in full shape by 10.04.2013 and plant was synchronized with the grid at 33 KV on 22.04.2013 at 13.54 hrs. Pending execution of the evacuation arrangement and the Power Purchase Agreement, the generator extended the power supply to the workers colony which is nearer to local village from 30.03.2013 till 22.04.2013 at 13.54 hrs until the plant was synchronized to the sub-station after completion of evacuation arrangement. Further, the generator has continued to supply free power to Government of Andhra Pradesh through dedicated line during the period 22.04.2013 to 20.06.2013, upto the Power Purchase Agreement was signed and came into force. After the execution of the Power Purchase Agreement, the generator has supplied the power to the consumers M/s. Dr. Reddy's Laboratories Ltd., and bills have been raised as per the Power Purchase Agreement . 6.12. From the aforesaid facts and material on record, I find that the appellant's solar plant was com ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
