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2019 (7) TMI 1047 - HC - Income TaxAdditional depreciation on the wind mill - passive use of machinery - period of trial run - as per assessee said wind mill was commissioned as well as started generation of electricity based on the materials placed on record - HELD THAT:- Even trial production machineries kept ready for use etc., were considered to be used for the purpose of business to qualify for depreciation. In “CIT -Vs- Geo Tech Construction [2000 (3) TMI 42 - KERALA HIGH COURT] , the machinery which was purchased by the assess from Pondicherry was yet to reach work site at Kochi and were in transit, and the Court held that it would amount to passive use and would qualify for depreciation. Thus, we are of the considered view that the Tribunal erred in reversing the order passed by the CIT (Appeals). For all the above reasons, the substantial question of law No.1 is answered in favour of the assessee. Claim of additional depreciation - generating entity on the basis of electricity is not an “article” or “thing”- HELD THAT:- Whether generation of electricity would fall within the ambit of business of manufacture or production of any article or not issue appears to be no longer res integra and decided in favour of the assessee in “CIT -Vs- NTPC [2019 (3) TMI 207 - DELHI HIGH COURT] . In the said case, the assessee was engaged in the production of thermal power and was held to be eligible to claim additional depreciation under Section 32(1)(iia). The Court took into consideration the decision of the Constitution Bench of the Honourable Supreme Court in “State of A.P. -Vs- NTPC [2002 (4) TMI 694 - SUPREME COURT] wherein the Apex Court held electricity to be “goods” for the purpose of sales tax. Electricity is capable of abstraction, transmission, transfer, delivery, possession, consumption and use like any other movable property. Following the same logic, to deny the benefit of additional depreciation to generating entity on the basis of electricity is not an “article” or “thing”, is an artificially restrictive meaning of the provision and the benefit of additional depreciation under Section 32(1)(iia) has to be granted to the assessee. This decision will fully apply to the facts of the present case and consequently, it has to be held that the assessee is entitled for additional depreciation as well. Accordingly, the substantial question of law No.2 is also answered in favour of the assessee.
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