TMI Blog2014 (2) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... Act - block of assets u/s 2(11) - Assets used for the purpose of other than engineering products – Held that:- The findings of the Tribunal is justified in respect of the wind energy generators used in the process of manufacture of wind mills - So far as other machineries, viz., drilling machines, boring machines, boring machine for foundation work and lathe machine, are concerned, the Assessing Officer, on verification of the Written Down Value (WDV) of 100% depreciation block, found that the entire plant and machinery is included in the block - The generator sets being one such block of asset falling for consideration under Clause 10A of the depreciation table, this alone would qualify for the rate as prescribed under 'renewal energy devices', i.e., 100% depreciation - As far as other machineries are concerned, as rightly pointed out by the Assessing Officer, the same would qualify for depreciation at 25% and not at 100% as claimed by the assessee - the Assessing Officer is directed to re-work the relief on the grant of depreciation treating generator sets as the block of assets used in the manufacture of wind mills and the other machineries would not fall within that head of blo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f depreciation only and the same can be examined after fresh hearing. (c) Accordingly, a fresh hearing was directed to be fixed in the main appeal. Challenging the order passed in the Miscellaneous Petition, T.C. (A) No.367 of 2006 has been filed by the Revenue, which has been admitted by this Court on the following substantial question of law: "Whether in the facts and circumstances of the case, the Tribunal was right in reconsidering the judgment and interpreting the same and thereby reversing the decision passed in the main appeal in the Miscellaneous Petition under Section 254 (2)? " (d) In the meanwhile, the assessment order dated 26.11.2001 for the Assessment Year 1995-96 disallowing the claim of 100% depreciation by the Assessing Officer was challenged by the assessee before the Commissioner of Income-tax (Appeals) and the Commissioner confirmed the order of the Assessing Officer. Aggrieved by the same, the assessee filed appeal before the Income-tax Appellate Tribunal in I.T.A.No.1546/Mds/2002. (e) Pursuant to the order dated 17.08.2005 passed in the Miscellaneous Petition, the Tribunal took up the main appeal in I.T.A.No.640/Mds/2000 for decision afresh, along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enerators to qualify for 100% depreciation. 5.We have heard the learned counsels appearing for both the parties and perused the materials placed on record. 6.The first issue to be considered is whether the Tribunal was justified in exercising its power under Section 254 (2) of the Act and allowing the Miscellaneous Petition by setting aside the final order and restoring the appeal to its file to decide the question of claim for depreciation afresh. 7.1. Sub-section (2) of Section 254 of the Act gives power to the Appellate Tribunal at any time within four years from the date of the order, with a view to rectify any mistake apparent from the record, amend any order passed by it under sub-section (1) and shall make such amendment for the mistakes brought to its notice by the assessee or the Assessing Officer. 7.2. The scope of sub-section (2) of Section 254 was considered by the Hon'ble Supreme Court in Honda Siel Power Products Ltd. (supra). While considering the scope of power of rectification under Section 254(2), the Hon'ble Supreme Court pointed out that the purpose behind the enactment of Section 254 (2) is based on the fundamental principle that no party appearing befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly" was perhaps implied and accordingly, upheld the order passed by the First Appellate Authority. 9.The case of the assessee is that the decision of the Karnataka High Court in the case of Amco Batteries Ltd. (supra) has absolutely no application to the facts and circumstances of the present case and the Tribunal, having held that the table does not use the word "exclusively" and having been satisfied that the assessee's claim was reasonable, committed a serious mistake in rejecting the assessee's claim. The Tribunal, on going through the Miscellaneous Petition filed under Section 254 (2) of the Act was satisfied that the decision of the Karnataka High Court would not apply and therefore, recalled the order and restored the appeal to be heard afresh on the said point alone. 10.We may, at this stage, point out that the decision of the Karnataka High Court in Amco Batteries Ltd. has absolutely no relevance to the facts of this case. In the said case, the Karnataka High Court found that as a matter of fact the assessee therein, though a manufacturer of batteries, had a separate division in its factory for making rubber containers, which are used for making batteries and which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y generators used in the process of manufacture of wind mills. So far as other machineries, viz., drilling machines, boring machines, boring machine for foundation work and lathe machine, are concerned, the Assessing Officer, on verification of the Written Down Value (WDV) of 100% depreciation block, found that the entire plant and machinery is included in the block and during 1994-95; that the total turnover was Rs.48.10 crores, which includes sale of 24 wind mills and that the total turnover of the wind mills was around Rs.20 crores. Upto the assessment year 1994-95, the assessee claimed depreciation of plant and machinery at 25% only. But, after the Assessment Year 1995-96, the assessee has grouped the block of assets along with the addition to fixed assets made during the assessment year 1995-96 and claimed 100% depreciation. Further, the Assessing Officer pointed that the assessee has transferred the entire block of assets in 100% depreciation block treating that all plant and machinery were being used for manufacture of wind mills. Thus, in the absence of any materials produced by the assessee, the Assessing Officer allowed depreciation at 25% because those machineries as ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITTINGS - III.MACHINERY AND PLANT (not being a ship) - A. .. B. .. C. .. D. .. (10A) Renewal energy devices, being - i.Flat plate solar collectors ii.Concentrating and pipe type solar collectors iii.Solar cookers iv.Solar water heaters and systems v.Air / gas / fluid heating systems vi.Solar crop driers and systems vii.Solar refrigeration, cold storages and air-conditioning systems viii.Solar steels and desalination systems ix.Solar power generating systems x.Solar pumps based on solar thermal and solar photovoltaic conversion xi.Solar photovoltaic modules and panels for water pumping and other applications xii.Wind mills and any specially designed devices which run on wind mills xiii.Any special devices including electric generators and pumps running on wind energy xiv.Biogas plant and biogas engines xv.Electrically operated vehicles including battery powered or fuel-cell powered vehicles xvi.Agricultural and municipal waste conversion devices producing energy xvii.Equipment for utilising ocean waste and thermal energy xviii.Machinery and plant used in the manufacture of any of the above sub-items ] ] 30 ] Sub-clause (xviii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
