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2014 (4) TMI 616 - AT - Income TaxAddition towards excess claim of depreciation on electrical equipments Held that:- The emphasis for granting higher rate of depreciation as far as wind electric generators are concerned, the necessity is to examine the functional test of the equipment - A categorical evidence has to be placed that the equipment is whether an integral part of wind mill power project - Such an evidence or finding is absent in the present case - nothing is on record to establish that on the touchstone of functional test the wind electric generators are so designed that they can only be used for power generation as done by the wind mill and meant for no other use. There is nothing on record, such as a report from a qualified person to establish that the wind electric generators are designed in such a manner to facilitate the power generation and distribution from windmill - a machinery does not require protection so installed in a wind mill power project but such a generator cannot be said to be a part and parcel of the project - the Appendix and the depreciation schedule has categorically worded that "windmills and any specially designed devices which run on wind mills" are qualified for 100 per cent rate of depreciation - the generators are not specially designed devices and are not entitled for higher depreciation as claimed by the assessee thus, the order of the CIT(A) set aside - Decided in favour of Revenue. Allowability of deduction u/s 80IA of the Act Explanation 5 to section 32(1)(iii) of the Act not considered Rule 18BBB not considered Held that:- The decision in Asst. Commissioner of Income-tax, Central Circle-5, Hyderabad & Others Versus M/s lanco Infratech Ltd. [2012 (10) TMI 529 - ITAT HYDERABAD] followed - CIT(A) rightly held that the assessee is eligible for higher rate of depreciation for the AYs 2002-03 and 2003-04 on wind mill project and accordingly, no depreciation remains to be claimed from the AY 2004-05 - the profits from wind power projects as calculated by the assessee company for the purpose of deduction u/s 80IA of the Act are correct. The assessee had computed profits of the undertaking and has also filed certificate of the auditor in respect of the eligible undertaking - there was no infirmity in the order of the CIT(A) in holding that no depreciations remains to be claimed from the AY 2004-05 and the profits from wind power projects as calculated by the assessee company for the purpose of deduction u/s 80IA of the Act are correct - the order of the CIT(A) is upheld Decided against Revenue.
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