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2016 (9) TMI 1045 - AT - Income TaxRevision u/s 263 - allowability of additional depreciation on windmill - Held that:- The grounds mentioned by learned CIT in show-cause notice are different and the order passed by learned CIT u/s. 263 is based on another ground and therefore the assessee could not get opportunity to explain the point recorded at the time of passing the final order. Therefore we hold that the order passed by learned CIT u/s. 263 is bad in law and not sustainable in law. Therefore the same is quashed. Even, otherwise on the merits of the case, the ld. CIT(A) has held that this “windmill” was not used in any manufacturing activity. Therefore as per CIT this does not qualify for additional depreciation. From the afore mentioned reading we find that the only requirement of section is that the assessee should be engaged in the business of manufacture or production of any article or thing. This condition is clearly satisfied by the assessee who is engaged in the manufacture of pigments, HDPE etc. A close reading of the provision brings out that there is no requirement that the windmill should be used in any manufacturing activity. However, a windmill which generates power is itself engaged in the manufacturing of production of an article or thing. We found support from the judgement in the case of Associated Bearing Co. Ltd. vs. Commissioner of Income-tax (2005 (10) TMI 75 - BOMBAY High Court ) and Commissioner of Income Tax vs. Atlas Export Enterprise (2015 (3) TMI 846 - MADRAS HIGH COURT ). Therefore, while relying upon the judgement, we hold that the assessee clearly satisfied the conditions of section 31(1)(iia) and is entitled to the claim of additional depreciation in respect of wind mills. - Decided in favour of assessee
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