TMI Blog2013 (12) TMI 1451X X X X Extracts X X X X X X X X Extracts X X X X ..... re September 30, 2007. - All the details in respect of the erection of the windmill submitted before the Assessing Officer including the certificate issued by the S.E., Udumalpet Elecy. Distn. Circle, Udumalpet. The certificate issued by the S.E. was not challenged by the Department. Therefore, in our view, it is not a fit case to invoke section 263 of the Act - Tribunal directed the Assessing Officer to allow depreciation based on the certificate issued by the State Electricity Board. The hon'ble High Court upheld the order of the Tribunal on the ground that when the Department has not questioned the certificate issued by the State Electricity Board, the Tribunal was justified in directing the Assessing Officer to allow the depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently a perusal of the details filed before the Assessing Officer during the course of assessment proceedings for the assess ing year 2008-09 showed that the assessee has claimed loss of ₹ 3,61,07,788 from windmill business which included depreciation loss of ₹ 2,95,60,437 claimed at 80 per cent. on the cost of a new 600 KV windmill, which is stated to have been erected on September 1, 2007. However, the erection invoices available on record shows that the windmill erection was completed only on September 30, 2007. Further according to the TEDA guidelines, the procedure for obtaining a sanction for installation of windmill and for connecting the same with the power grid are as under : (i) That the assessee should apply for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for production only in the second half of October 2007 and that depreciation was to be restricted to 40 per cent. than that was claimed at 80 per cent. in the return of income. However while finalising the scrutiny assessment for the assessment year 200809 under section 143(3) of the Income-tax Act, 1961 on December 15, 2010, the Assessing Officer has omitted to consider this issue by restricting the claim of the assessee depreciation on new 600 KW windmill generator. Accordingly proceedings under section 263 of the Income-tax Act, 1961 was initiated for the assess ment year 200809 by issue of show-cause notice under the said section on May 2, 2012 to pass an order under section 263 of the Income-tax Act, 1961 as the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e's own case and requested that the same may kindly be followed. 4. In the course of assessment proceedings, all these details were furnished to the Assessing Officer. The Assessing Officer has specifically verified the invoices raised by the supplier, M/s Suzlon Energy Limited, inspection report issued by the TNEB, approval by the Chief Electrical Inspector to the Government, production report, etc. After being convinced that the operation of the windmill was started on September 30, 2007 and the Assessing Officer has completed the assessment under section 143(3) of the Act. Therefore, it is not open for the learned Commissioner of Income-tax to initiate proceedings under section 263 of the Act. 5. On the other hand, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mill produced the electricity on or before September 30, 2007. Therefore, the assessee is eligible for depreciation at the rate of 80 per cent. The doubt expressed by the learned Commissioner of Income-tax that when the assessee has started the project on September 1, 2007, he could not have been completed on September 30, 2007, within a short span of time, keeping in view that the assessee had received the loan from the Indian Bank on September 28, 2007. But it is a fact that the assessee's windmill was erected and generated 40 units of electricity on September 30, 2007 vide lr.No. SE/UEDC/UDT/AO/AS/JA4/F.WINDFARM S. C. No. 1491/ C/07 of SE, TNEB, Udumalpet. When the assessee erected the windmill and generated wind power, it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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