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2016 (11) TMI 1122 - AT - Income TaxContribution for common infrastructure facility in power evacuation - nature of expenditure - revenue or capital expenditure - Held that:- We have gone through the assessment order and noticed that at page 2 of the assessment order in Para 4.1 the assessee has made a claim regarding payment in respect to infrastructure facility of common power evacuation of ₹ 37.50 lacs to Suzlon Energy Ltd. We find that these facts are very much available on record of the AO as well as the CIT (A). The only issue which is to be considered is as to whether these facts need verification and the issue is to be set aside to the file of the AO. Hence, we admit the additional grounds of appeal and set aside the issue to the file of the AO for deciding the issue after allowing reasonable opportunity of being heard to the assessee. This issue of the assessee’s appeal is allowed for statistical purpose. Depreciation on civil work foundation and deprecation on erection of HT lines - Held that:- We are of the considered opinion that the civil work foundation, erection of HT Lines and Switchgear etc. are integral part of Windmill and it cannot be viewed separately from Plant & Machinery. Accordingly, we are in agreement with the arguments of the learned Counsel for the assessee that the civil work for foundation is integral part of the Plant & Machinery and it cannot be viewed separately from Plant & Machinery for which foundation is laid. Similarly, HT Lines and Switchgear etc. are also integral part of Windmill and hence, eligible for higher rate of depreciation i.e. rate applicable on Windmill. We direct the AO accordingly Addition of interest expenses disallowed - Held that:- We find that there is no dispute that the assessee had a Windmill installed in earlier year also and was producing power. Installation of Windmill in this year is only expansion of existing business and not a new business. It is also a fact that the loan taken from Shri V. R. Venketachalam of ₹ 5 Crores has been used for purchase of Windmill for expansion of business and hence, allowable as business expenditure u/s 36(1) (iii) of the Act. We are also of the view that the assessee has made payment to partners as per the Partnership Deed and within the limit prescribed u/s 40(b) of the Act. Hence, we delete the addition and allow this issue of the assessee’s appeal.
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