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2017 (8) TMI 611 - HC - Income TaxAdditional depreciation of 20% on windmills u/s 32(1)(iia) - whether windmills have not connection with the business activity of the assessee? - Held that:- The only requirement under Section 32(1)(iia) of the Act is that the assessee should be engaged in the business of manufacture or production of article or thing, to claim additional depreciation on installing of plant or machinery on or after the cut off date i.e. 31.03.2002. The setting up of new plant and or machinery need not have the operational connectivity to the article or thing which has been manufactured by the assessee. The further contention on behalf of the Revenue that the respondent – assessee is not in the business of generation of power and, therefore, not entitled to the benefit of additional depreciation completely overlooks the order of the Assessing Officer which clearly records that the assessee is in the business of wind power energy. This fact is not disputed either by the Commissioner of Income Tax or the Tribunal. Therefore, the question as framed that the windmills have no connection with the business activity of the assessee is factually incorrect. In view of the fact that Madras, Gujarat and Karnataka High Courts have taken a view that additional depreciation on windmills acquired and installed prior to 31.03.2002 is available under Section 32(1)(iia) of the Act. All that is required for allowing additional depreciation is that the assessee must be engaged in the manufacture or production of any article or thing, and such an assessee would on the setting up of a new machinery or plant would be entitled to additional depreciation on the new plant and or machinery under Section 32(1)(iia) of the Act. There is no requirement in Section 32(1) (iia) of the Act that additional depreciation on the new plant or machinery would be available only if the plant or machinery has some nexus/connection with the article or thing being manufactured by the respondent-assessee. To accept the Revenue's contention would require reading words into Section 32(1)(iia) of the Act which is not permissible. - Decided in favour of assessee
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