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2015 (11) TMI 1607 - AT - Income TaxDisallowance of higher rate of depreciation on windmills - allowability of similar depreciation rate as applicable to windmills, also to the ‘foundation & civil work’ and ‘erection & commissioning work’ executed for these windmills - Held that:- . Since the civil work and erection & commissioning expenses incurred are in relation to installation of windmill, depreciation on the same should be provided at the rate applicable to windmill. We find that the aforesaid assertions made on behalf of the assessee before the Revenue remains uncontroverted. The expenses incurred on erection & commissioning, civil work, etc. being necessary adjunct to the windmill and is not meant for any other purposes other than for operational functioning of wind turbine and therefore cannot be treated differently. Therefore, impugned capital expenditure towards civil work & commissioning etc. also will qualify for the same rate of depreciation as applicable to wind turbine itself. The issue is no longer res-integra and is covered by in the case of Poonawala Finvest & Agro (P.) Ltd. vs. ACIT, (2008 (6) TMI 586 - ITAT PUNE ) wherein it has been clearly held that the capital expenditure incidental to the windmill has to be tested on the touchstone of the functional test and the assessee will be entitled to higher rate of depreciation on such incidental expenditure, if it has no other use except for power generation done by the windmill. - Decided in favour of assessee
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