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2022 (7) TMI 1000 - ITAT CHANDIGARHDepreciation on power plant at written down value method as against claimed by the appellant at straight line method since last more than five years - HELD THAT:- The provisions of section 32(1)(i) of the Act provides that an undertaking engaged in generation or generation and distribution of power shall be allowed depreciation on such percentage on actual cost basis as per specified rules. What is relevant to note that the term used is an "undertaking" and not an "entity" or an "assessee". Therefore, what is relevant to examine in the instant case is whether the assessee has more than one undertaking and if the answer to the same is in affirmative and whether one of the undertakings is engaged in generation or generation and distribution of power, in that case, the undertaking and in turn the assessee at the entity level shall be eligible for depreciation under SLM basis. As per the Inspector report who has carried out on the spot verification of the assessee's premises, the assessee has a captive power plant which is used to generate electricity which was utilized in the various units of the assessee including towel unit, spinning unit and WTP Plan plant of the assessee. We therefore find that the undisputed facts are that there are multiple units or undertakings of the assessee company and one of the undertakings is engaged in generation of power and which is captively consumed by other units. There is no bar under law that a captive undertaking is not eligible for deprecation under SLM basis - we note that in the past and subsequent years, the depreciation has been allowed under SLM basis and therefore, we see no rationale and justifiable basis for the CIT(A) to disturb the basis of allowing the depreciation under WDV instead of SLM basis as so claimed and allowed to the assessee over the years where there are no changes in the facts and circumstances of the case. We hereby set-aside the order of the CIT(A) and direct the AO to allow the depreciation on SLM basis as so claimed by the assessee and the ground of appeal is thus allowed.
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