TMI Blog2006 (9) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... er panels and its accessories were never transported and delivered to the assessee without which operation of Windmill is not possible." 3. Briefly stated, the facts of the case are that the assessee was engaged, during the period under appeal, in the business of manufacturing and sale of automobile seats and spare parts of seats. During the previous year relevant to the assessment year 1996-97, the assessee claimed to have purchased and installed two windmills at a total cost of Rs. 3,07,50,000. Depreciation at the rate of 100 per cent was claimed on the windmills out of which 50 per cent was claimed in assessment year 1996-97 as the windmills were reportedly used for less than 6 months in that year and the remaining 50 per cent was claimed in assessment year 1997-98. It was the case of the assessee that it had purchased the aforesaid equipments from M/s. NEPC Micon (I) Ltd. and commissioned the windmills before 31st March, 1996 and therefore it was entitled to claim depreciation at the rate of 100 per cent as the windmills so commissioned were renewal energy saving devices under Appendix I of the Income-tax Rules. The Assessing Officer made comprehensive enquiries in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y challan Nos. 4334 and 4335 dated 5-2-1996. Copies of these two delivery challans have been placed by the assessee in its paper-book filed before us. It is seen that both the aforesaid delivery challans were issued by NEPC Micon, Madras on 5-2-1996. Delivery challan No. 4334 was issued for delivery of 2 Nos. of windmill power panels with accessories through for transportation and delivery through lorry No. KA-01-5341/SCPL at Kalyanpur. In this challan the approximate value of the goods was shown at Rs. 8 lakhs. Delivery challan No. 4335 was also issued on 5-2-1996 for delivery of two sets (4 Nos.) of windmill control and capacitor panels through lorry No. KA-01-5341/SCPL for delivery at Kalyanpur. In this challan, value of the goods was shown at Rs. 6 lakhs. Both the aforesaid delivery challans are in favour of the assessee. It was the case of the assessee before the Assessing Officer that the aforesaid equipments were transported by M/s. Savani Carrying Pvt. Ltd. and delivered at the premises of the assessee. In support of the aforesaid submission, the assessee had also filed before the Assessing Officer a copy of consignment note No. 5340 issued by Savani Carrying Pvt. Ltd. ("as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed by the assessee before the Assessing Officer, the value was shown at Rs. 14 lakhs whereas the value of goods was shown at Rs. 21,45,000 in Savani s copy of consignment note furnished by Savani Carrying Pvt. Ltd. directly to the Assessing Officer. Third inconsistency related to the amount of freight shown in the copies of both the consignment notes. In the assessee s copy of the consignment note of Savani Carrying Pvt. Ltd. furnished by the assessee before the Assessing Officer no amount of freight was shown whereas the amount of freight was shown at Rs. 10,020 in Savani s copy of the consignment note furnished by Savani Carrying Pvt. Ltd. directly to the Assessing Officer. 7. In view of the aforesaid inconsistencies, the Assessing Officer requested the Deputy Director (Investigation), Unit-III(4), Chennai for further investigation as NEPC Micon Ltd. was located at Madras. Delivery Challan Register produced by NEPC Micon Ltd. containing Carbon copies of delivery challan Nos. 4334 and 4335 reportedly issued by NEPC-Micon Ltd. was impounded. On perusal of those delivery challans, it was found that the goods, namely, Windmill power panel with accessories and windmill control a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erected not commissioned before 31-3-1996 and thus denied the deduction for depreciation, as claimed by the assessee for both the years. 10. The Assessing Officer also considered the plea of the assessee that it had supplied electricity to Gujarat State Electricity Board before 31-3-1996 and that this fact by itself proved that the assessee had commissioned the windmills before 31-3-1996. The assessee had relied upon the certificate issued by Gujarat Energy Development Agency (GEDA) certifying share of electricity generated by wind-farms for the month of March 1996 as also for April 1996 to May 1997, Certificate of commissioning of windmills issued by GEDA, Test Report for the purpose of verification of commissioning issued by GEDA and copy of the certificate of inspection issued by the Electrical Inspector. The Assessing Officer has dealt with the issue in para 4.23 of the assessment order for assessment year 1996-97 as also in paras 4.2 and 4.3 of the assessment order for assessment year 1997-98. Para 4.23 of the assessment order for assessment year 1996-97 reads as under : "4.23 In view of the above discussion, and the facts as detailed hereinabove, it is clear that the wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by M/s. Bayer ABS (ABS Industries) ( iv )Purchase of land for windmills reflecting in Schedule E to the annual account filed along with the return of income. 4.3 In this regard it is crucial to point out that the issue involved for the purpose of allowance of depreciation is whether the equipments were put to use or not. As has been discussed in detail in the assessment order for assessment year 1996-97, since certain crucial equipments necessary for function for the windmills were not supplied to the assessee by the supplier, there is no question of such windmills having been put to use. Here, it is very important to note that in spite of the fact that the assessee has enumerated certain evidences as above and claimed that these evidence prove the stand of the assessee, the assessee has never been to bring on record direct evidence regarding the supply/purchase of the equipments mentioned in invoice No. 16779 and consignment note No. 5340 either from M/s. NEPC Micon Ltd. or from any other source. The letter of M/s. NEPC referred to by the assessee in its letter dated 11-8-1989 cannot be taken as genuine in view of the reasons stated elaborately in the assessment order fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mill at the site of the appellant Co. M/s. NEPC MICON (I) Ltd. were also responsible for their installation, erection and commissioning of the windmill at the site. Therefore, the appellants did not have to pay transportation charges for supply of windmill at the site and they were not concerned with the transporters as well as the transporters had acted upon the instructions of M/s. NEPC MICON (I) Ltd. for transporting materials to various sites. The copy of the purchase order was also available at the time of assessment proceedings with the Assessing Officer. This information in all, in the interest of natural justice, would have been discussed by the Assessing Officer in the assessment order. On enquiry with M/s. NEPC MICON (I) Ltd., regarding delivery of the Windmill at the site, M/s. NEPC MICON (I) Ltd. had given copies of letters dated 8-8-1998 and 25-11-1995, addressed to the Assessing Officer. Both these letters were not considered in the assessment order. The letter dated 8-8-1998 confirms the sale of Windmill, whereas the letter dated 25-11-1995 given details of equipments and materials supplied to various transporters division with regard to a letter of Gujarat State Ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he installs or commissions a renewable energy device being windmills and starts generating electricity from such a device. In order to install such a device and generate electricity from such a device, the assessee should not only establish the factum of procurement of the windmills but also their installation and generation of electricity from them. If the assessee does not procure the windmills, it cannot install or commission them. If the assessee wants the revenue to believe that it had generated electricity from the windmills installed by it, it must demonstrate not only the procurement of windmills but also their transportation, installation and also generation of electricity from them. If the assessee fails to prove the transportation of equipments necessary for installation of the windmills, the question of their installation and generation of electricity from them cannot arise. This is a quite natural sequence of events. Emphasis of law governing depreciation at the rate of 100 per cent to windmills, as energy saving devices, is to ensure installation of such devices through investment by the assessee claiming 100% depreciation. in the case before us, the assessee has subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with reference to the independent meters installed for each windmill. The reasoning given by the Assessing Officer in para 4.23 of the assessment order for assessment year 1996-97 and in paras 4.2 and 4.3 of the assessment order for assessment year 1997-98 in this behalf has also not been controverted in the order passed by the ld. CIT(A). The Assessing Officer has further observed that depreciation at the rate of 100 per cent was not admissible unless the assessee established the procurement, transportation, installation and commissioning of renewal energy devices before the expiry of the relevant previous year. The assessee wants the revenue to draw the presumption of installation of windmills on the ground that electricity generated from its wind-farm was supplied to GEDA. Presumption cannot be drawn unless the basic facts necessary for drawing the presumption are established. In the present case, the assessee has not established the basic facts of transportation and delivery of such huge equipments at the premises of the assessee in Gujarat and hence presumption cannot be drawn about their installation before 31-3-1996. It was for the assessee to satisfactorily explain and e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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