TMI Blog2011 (6) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 010 - - - Dated:- 15-6-2011 - SHRI N.V.VASUDEVAN, SHRI R.K.PANDA, JJ. Appellant by : Ms. Heena Doshi Respondent by : Shri V.V.Shashi ORDER PER N.V.VASUDEVAN, J.M, This is an appeal by the assessee against the order dated 23/2/2010 of CIT(A) IV, Mumbai relating to assessment year 2005-06. Ground No.1 raised by the assessee reads as follows: Ground No.1: a) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the disallowance of depreciation on windmills amounting to ₹ 4,66,68,750/- by holding that the windmills are commissioned after 31/3/2005. He ought not to have done so. b) In doing so the learned CIT(A) has erred in upholding the action of the ACIT in so far as it concerns relying on the statement made in course of survey proceedings u/s.131 of the Act ignoring the facts of the case. The statement in course of survey cannot be a basis for addition of depreciation in the assessment without going into the facts of the case. He ought not to have done so. c) Without prejudice to above, the learned CIT(A) should have directed to reinstate the clo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of. We are bonafidely not aware of pre-condition of actually putting into user of such assets. As per our records, electricity generation started with effect from 30/4/2005 and we had issued/ raised first invoice bearing No.HP/WF/001-3/2005-06 dated 09/06/2005. I am giving you a copy of such bills raised dated 09/06/2005. It is, therefore, evident that the pwer generation started w.e.f. 30/4/2005 only, therefore, for the year ended 31/3/2005 is apparently incorrect. In view of this bonafide and technical mistake we undertake to revise the return of income filed by us for A.Y 2005-06 by 20/3/2006 and we shall also pay the taxes due thereon. A copy of revised return will also be furnished to you in due course of time. Hence, assessee had voluntarily offered to withdraw the claim of depreciation as made under bonafide belief. 4. As can be seen from the above statement it was the stand of the assessee that the WEGs were commissioned on 31/3/2005 and the actual generation of electricity started only from 30/4/2005. It can also be seen from the statement that the assessee agreed to file a revised return withdrawing the claim of depreciation. The assessee however did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bill substation, use of power transmissions lines for transfer of power to the point of utilization. The said process was completed by the Company which is substantiated by the certificate from Tamil Nadu Electricity Board certifying that the said WEGs were commissioned on 31st March, 2005 vide their letter dated 5th April, 2005. They have also given electricity generation particulars giving initial reading as on 31/3/2005 vide their letter dated 5/5/2005. Considering the above, the assessee claimed depreciation on installed WEGs which were acquired and put to use before 31/3/2005. The basic condition required to be fulfilled for claiming depreciation viz., (1) ownership of the asset and (2) use of the asset in the business, according to the Assessee, were duly satisfied. The Assessee also submitted that the expression used for the purpose of business has been explained in the case of CIT vs. Birla Jute Industries Ltd., 260 ITR 55(Cal). The word business includes the whole process of the undertaking carried on by the assessee. It begins with the initial process to achieve the end product and ends with the realization of the ultimate profit. A business of manufacturing does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble the assessee to claim depreciation on WEG. On this issue the ld. Counsel for the assessee has placed reliance on certain judicial pronouncements. In the case of Omkar Testile Mills Pvt. Ltd. vs. ITO (2008) 5 DTR (Ahd) (Trib) 187 the issue with regard to allowing depreciation on Wind Mill had come up for consideration. The assessee had relied on the certificate of Gujarat Energy Development Agency certifying commissioning of Wind Mills. A test run was also undertaken. The assessment year involved was 1995-96 and the test run was done on 27/3/1995. The question of allowing depreciation on the above facts was considered by the Tribunal. The Tribunal held that the commissioning and test run would be sufficient to hold that the wind mills was used for the purpose of business and the assessee was entitled to claim depreciation. The Mumbai Bench of ITAT in the case of Godavri Corporation Pvt. Ltd. vs. ITO ITA Mp/309/M/08, A.Y 2002-03 order dated 15/4/2009 had occasion to consider a claim for depreciation on account of use of Wind Mills. The Tribunal firstly noticed that there was evidence to show that there was installation and commissioning of Wind Mills on 30/3/2002. Thereafter the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis to sustain the disallowance of depreciation. In the circumstances, we direct the Assessing Officer to allow the claim of the assessee. Thus ground No.1 raised by the assessee is allowed. 14. Ground No.2 raised by the assessee reads as follows: On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the disallowance of bad debts amounting to ₹ 1,50,000/- by completely ignoring the facts of the case and also the submissions made. He has erred in doing so since the same are allowable as trading losses u/s. 28. He ought not to have done so. 15. The assessee wrote off a sum of ₹ 1.50 lacs as bad debts. This was an inter-corporate deposit given to one of its sister concern M/s. ICA Mekkat Pvt. Ltd. According to the Assessing Officer the loss on account of non payment of ICD was a capital loss and cannot be allowed under section 36(1)(vii) of the Act. On appeal by the assessee the CIT(A) confirmed the order of the Assessing Officer holding that it is capital loss and not a loss incurred in the usual course of business of the assessee. 16. Before us the ld. Counsel for the assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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