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2022 (4) TMI 839 - AT - Income TaxAdditional Depreciation on Power Generation Unit - Depreciation at the rate of 80% on all the Plant & Machinery used in the co-generation unit - Extending benefit of initial depreciation to the power sector - depreciation Claim of 80% OR 15% - AO disallowed the same on the ground that the words ‘or in the business of generation and distribution of power’ were inserted by Finance Act 2012 w.e.f. 01.04.2013 and therefore, the additional depreciation would be allowable only from AY 2013-14. - HELD THAT:- We find that this issue is covered in assessee’s favor by the decision of Vishakhapatnam Tribunal in Sri Sarvaraya Sugars Limited [2017 (12) TMI 1220 - ITAT VISAKHAPATNAM] wherein it was held that various components which form integral part of cogeneration plant are to be allowed higher rate of depreciation. We find that the facts are similar in the present case whereas the undisputed findings are that the various components form part of integral part of cogeneration plant. These components could not be used on standalone basis but part and parcel of power generation unit. Each item would not have any function by itself except when it forms part of the whole system. Therefore, no infirmity could be found in the impugned order, on this issue. The grounds thus raised stands dismissed. Eligibility to claim additional depreciation u/s 32(1)(iia) - HELD THAT:- We find that it is undisputed position that the assessee has fulfilled all the conditions laid down u/s 32(1)(iia) for claiming additional depreciation. In such a case, new plant & machinery as installed by the assessee would be entitled for additional depreciation since the assessee was engaged in manufacturing and production of article or thing. In the case of CIT V/s VTM Ltd. [2009 (9) TMI 35 - MADRAS HIGH COURT] held that in order to claim additional depreciation u/s 32(1)(iia), what is required to be satisfied is only that a new machinery or plant has been acquired and installed after 31-3-2002 by an assessee, who was already engaged in business of manufacture or production of any article or thing. The provisions do not state that setting up of a new machinery or plant, which was acquired and installed after 31-3-2002, should have any operational connectivity to article or thing that was already being manufactured by the assessee. Respectfully following the same, we dismiss the grounds raised by the revenue.
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