2012 (1) TMI 238 - AT - Income Tax

Summary

Issues involved: Appeal against order of ld CIT(A)-II, Jaipur regarding deletion of addition of excess depreciation claimed on Wind Turbine.

Issue 1: Excess depreciation claimed on Wind Turbine

1. The revenue filed an appeal against the order of ld CIT(A)-II, Jaipur dated 20/06/2011, challenging the deletion of addition of Rs. 38,60,680 made by the AO by way of disallowance of excess depreciation claimed on Wind Turbine.

2. The Tribunal noted that a similar issue was raised by the revenue in the case of the assessee for the earlier assessment year. In that case, the Tribunal had dismissed the appeal of the revenue after observing that the AO allowed 80% depreciation only on the cost of the windmill plant, and other related items were also entitled to depreciation at a higher rate due to being integral parts of the windmill.

3. Citing the decision of the Hon'ble Madhya Pradesh High Court in a similar case, the Tribunal held that items like foundation, platform, erection, installation of plant and machinery, and other civil work carried out for installation are integral parts of the windmill and are entitled to claim depreciation at 80%. Therefore, the Tribunal found no infirmity in the order of the ld CIT(A) deleting the addition made by the AO on account of excess claim of depreciation.

4. Following their previous order in a related case, the Tribunal upheld the decision of the ld CIT(A) to disallow the addition made by the AO on account of excess claim of depreciation to the extent of Rs. 36,39,773.

5. Consequently, the Tribunal held that the ld CIT(A) was justified in directing the AO to allow depreciation, and therefore, the appeal of the revenue was dismissed.

The judgment was pronounced in open court on 13.01.2012 by N. L. Kalra (Accountant Member) of the Appellate Tribunal ITAT Jaipur.