TaxTMI 
TaxTMI 
2013 (8) TMI 283
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....urn of income was filed on 27.09.2008 declaring total income of Rs. 130,06,59,847. The case was selected for scrutiny and notice u/s 143(2) was issued on 13.08.2009. In the course of the scrutiny assessment, it was noticed by the Assessing Officer that the assessee had erected and commissioned on 23.01.2008 windmill of power generation capacity of 4.5 MW. The cost of Windmill was Rs. 27,58,72,617. The assessee apart from claiming normal rate of depreciation of 80% (applied 40% being used for less than 180 days), also claimed additional depreciation at 10% amounting to Rs. 2,75,87,268. 3. The scrutiny assessment order was completed u/s 143(3) of the Act by denying the benefit of additional depreciation. The relevant observation of the Asses....
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....eduction on account of additional depreciation on the assumption that the Windmill was not used in the manufacture of products of the Company and summising that the sale of power by the company is not its business. The Assessing Officer has erred in assuming that the power produced by the company should be used only in producing the products of the company. 4.1 The CIT (A) allowed the claim of the assessee and directed the Assessing Officer that the disallowance of Rs. 2,75,87,268 made by the Assessing Officer should be deleted. The findings of the CIT (A) read as follows: "4.9.1..................... I find that the objects of the company are detailed in Para 3 of the same, wherein at sub-Para (e) it is thus stated: To carry on the busin....
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....old to KPTCL and the power as such cannot be called as an article or a thing. 3. The CIT (A) ought to have appreciated that in view of Clause (D) of the proviso u/s 32(1)(iia), this benefit is not intended for acquisition and installation of such plant & machinery whose total cost is allowed as deduction in any one previous year and windmills although now are eligible for 80% depreciation were earlier eligible for 100% depreciation". 6. The learned DR relied on the grounds raised in the memorandum of appeal, whereas the learned AR supported the conclusions of the CIT (A). 7. We have heard the rival contentions and perused the relevant material on record. As rightly pointed out by the CIT (A), on perusal of the object of the company, it i....
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....be seen with the eyes, however, its effect can be seen and felt. The electricity can be transmitted, transferred, delivered, stored, possessed etc. The Hon'ble Supreme Court in the case of the CST vs. Madhya Pradesh Electricity Board (supra) has held that electricity falls within the definition of goods under the provisions of Sale of Goods Act, 1930. The Delhi Bench of the Tribunal in the case of NTPC Ltd. (supra) after a detailed examination of several judgments, Acts, Constitution of India, has concluded that the process of generation of electricity is akin to manufacture of an article or thing. 10. In view of the above, we are of the considered opinion that generation of electricity is a manufacturing activity. The assessee is invo....