2010 (12) TMI 1337 - AT - Income Tax

Summary

Issues involved: Appeal against order of ld. CIT(A)-II, Madurai for assessment year 2006-07 regarding depreciation on transformer and allowance of additional depreciation on windmill.

Depreciation on transformer: The assessee claimed depreciation on transformer as part of windmill installation. AO treated the cost of electrical yard as transformer separately and disallowed a portion of the claimed depreciation. Ld. CIT(A) allowed depreciation on the transformer based on relevant case laws. ITAT Chennai upheld CIT(A)'s decision citing the requirement of operational connectivity for additional depreciation u/s 32(1)(iia) and dismissed Revenue's appeal.

Additional depreciation on windmill: Revenue appealed against allowance of additional depreciation on windmill u/s 32(1)(iia). ITAT Chennai referred to previous decisions including the assessee's own case where additional depreciation was allowed on the cost of windmill. The appeal of the Revenue was dismissed based on the precedent set by the Hon'ble Madras High Court.

Conclusion: The ITAT Chennai upheld the decisions of the ld. CIT(A) regarding depreciation on transformer and additional depreciation on windmill, dismissing the appeal of the Revenue. The judgment was pronounced on 16.12.2010.