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TMI Blog2014 (4) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... rators from part of block of assets under the category of 'electrical equipments' and are eligible for depreciation at the rate of 25% only; 3. The CIT(A) ought to have considered that the electric generators are ancillary to run the Wind Mills and cannot be considered as Wind Mill which block of asset is covered by depreciation at the rate of 100%." 3. The Assessing Officer had made the additions towards excess claim of depreciation on electrical equipments for the AY 2002-03 at Rs. 5,52,63,750/- and for AY 2003-04 at Rs. 5,59,87,820/-. 4. The CIT(Central) Hyderabad in its order u/s 263 of the Act had pointed out that the depreciation at 25% only was allowable on electrical equipment which worked out to Rs. 3,76,14,006/- (for AY 2002-03 at Rs. 1,89,38,019/- and for AY 2003-04 at Rs. 1,86,75,987/-) whereas the assessee claimed depreciation of Rs. 14,81,41,506/- which was allowed by the Assessing Officer in order under section 143(3) r.w.s. 153A of the Act. 5. Consequently, the Assessing Officer during the course of assessment proceedings found that the assessee had claimed 100% depreciation on wind electric generators. The Assessing Officer was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; "4.6 It is not a disputed fact that the appellant is having windmill power project and was commissioned on 30-03-2002. The only point of contention is rate of depreciation on wind electrical generators. In this regard, the Rajasthan High Court in the case of CIT Vs. Agarwal Transformers have construed the word wind electric generators based on the principle of ejusdem generis and held that wind electric generators are eligible for the higher rate of depreciation. Also, in the case of Hindustan Platinum (P) Ltd. Vs. ACIT, ITAT Mumbai, depreciation has been allowed on wind electric generators at a higher rate. 4.7 I am of the view that the wind electric generators are the part of the wind power projects. The wind power projects cannot be operational without the wind electric generators. The higher rate of depreciation is given to encourage more wind power projects. Therefore, after considering the aforesaid facts of the case and case laws, I hold that the electric wind generators are eligible for higher ate of depreciation. Further, it is held that, the depreciation for the year 2003-04 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose interpretation. The correct method is that when particular meaning is attached to a word as is given in an instrument is to be gathered from the context, the nature of the subject-matter, the purpose or the intention of the author and the effect of giving to them one or more other permissible meaning on the object to be achieved. Applying this test, we have to gather the meaning of the words such as 'plant and machinery'. For interpreting the scheme of depreciation as prescribed under s. 32 it is not necessary that we should adopt a judge-sense meaning, which is sometimes artificial and imprecise in application by giving a meaning altogether different from the statutory provisions. The scheme of s. 32 unequivocally leads to the conclusion that on one hand "plant" and on the other hand "machinery" are to be treated as separate for the purpose of allowance of depreciation. Moreover, how one can ignore the block of assets as prescribed in the table of rates for the purpose of allowance of depreciation in Appendix I of IT Rules. As per this Appendix Part 'A' contains building in a separate head, furniture and fittings in another head and machinery and plant in a different head and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accompanied by P&L Account, Balance sheet, as if it is a separate and distinct entity." 14. Briefly the facts of the case are that the Assessing Officer had made the following disallowance with regard to the exemption claimed by the assessee company u/s 80IA from the profits derived from wind mill pertaining to the assessment years 2004-05 to 2007- 08: AY Amount (Rs.) 2004-05 38,21,764/- 2005-06 1,75,24,861/- 2006-07 1,54,29,336/- 2007-08 1,41,27,947/- 14.1 The Assessing Officer was of the opinion that while calculating the profits for deduction u/s 80IA of the Act, the assessee company had not reduced the profits by depreciation on wind mill and hence had claimed higher deduction. Further, the Assessing Officer was of the opinion that assessee had not maintained proper accounts in respect of enterprises claiming deduction u/s 80IA and hence, the balance sheet and profit and loss account as enclosed to form 10CCB were not acceptable. 15. Before the CIT(A), it was contended that the depreciation on the wind mill project had already been fully claimed in the assessment years 2002-03 and 2003-04 and there is no block of asset remaining to claim any deduction fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 09/07/2012 on similar ground held as follows: "18..The assessee had computed profits of the undertaking and has also filed certificate of the auditor in respect of the eligible undertaking. In these circumstances, we deem it fit to set aside this issue to the file of the Assessing Officer for reconsidering the profitability of the eligible undertaking on the basis of the working furnished by the assessee, after giving reasonable opportunity to the assessee to put forward its case." 18. As submitted by the assessee company that the depreciation on the wind mill project has already been fully claimed in the assessment years 2002-03 and 2003-04 and there is no block of asset remaining to claim any deduction from 2004-05 onwards. Therefore, we do not find any infirmity in the order of the CIT(A) in holding that no depreciations remains to be claimed from the AY 2004-05 and the profits from wind power projects as calculated by the assessee company for the purpose of deduction u/s 80IA of the Act are correct and, accordingly, the order of the CIT(A) is hereby upheld in all the assessment years under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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