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2021 (3) TMI 972 - HC - Income TaxAdditional depreciation on windmill u/s 32(1)(ii)(a) - AO denied the benefit on the ground that the primary business of the assessee does not include generation of wind energy, generation of sale of energy is not the primary business of the assessee company - ITAT allowed the deduction - As per revenue amended provision under Section 32(1)(ii)(a) permits for additional depreciation of actual cost of any new machinery or plant (other than ships and aircraft) acquired and installed only after 31st day of March 2012 to an assessee engaged in the business of generation and distribution of power? - HELD THAT:- Though the term 'Capital Consumption' is used by the assessee, it does not mean that whatever electricity energy generated by the assessee with their wind mills is directly fed into their system for being used for manufacture of Pet Bottles. If this is to be the opinion, then it will fall fowl of the regulations under which wind energy is being regulated in the State. The assessee, who owns the wind mill, if engaged in the generation of power, is mandated to feed the same into the grid of the Tamilnadu Electricity Board and pursuant to the agreement between the assessee and the Board, a grid is given to the generator. Therefore, going with scheme of things, it is undoubtedly clear that the assessee is into the generation of power, which is being fed into the grid of the Tamilnadu Electricity Board to be distributed. Identical issues was considered by this Court in M/S. VTM LIMITED [2009 (9) TMI 35 - MADRAS HIGH COURT] wherein held what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plaint should have been acquired and installed after 31st March 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed upto 31.03.2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a wind mill has nothing to do with the power industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in Section 32(1)(iia) . Also see TEXMO PRECISION CASTINGS [2009 (10) TMI 140 - MADRAS HIGH COURT] and M/S. HI TECH ARAI LIMITED [2009 (9) TMI 60 - MADRAS HIGH COURT] - Decided against revenue.
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