TMI Blog2014 (1) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... ind any infirmity in the action of the CIT(A) which we hereby affirm. Cost relating to labour charges for erection and installation of windmill. Such expenditure forms integral part of cost of the windmill and therefore, there is no mistake on the part of the CIT(A) to have considered such expenditure as eligible for depreciation at 80%. Cost towards processing fee and MEDA application fee the CIT(A) apportioned such cost towards wind turbine and other eligible assets on one hand and of civil costs incurred, on the other hand. 60% of such cost have been apportioned towards wind turbine, etc., and have been held to be eligible for higher rate of depreciation at 80% and on the balance, the CIT(A) allowed depreciation as worked out by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) erred in holding that the cost of new wind mill will include alongwith the cost of the wind turbine generator, the components for generation of electric supply and electrical items and components of RE device and tubular towers for the purpose of allowing depreciation at special rate as these items are not wind mill or specially designed devices, which run on the wind mill. 2. On the facts and in the circumstances of the case and in law the Commissioner of Income-tax (Appeals) erred in holding that labour work related to installation of wind turbine generator was required to be included in the cost of the wind mill for allowance of depreciation at special rate when the said expense was required to be spread over in the proporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that certain elements on the cost, which were related to civil works and electrical items, were entitled to depreciation @ 10% to 15% respectively and only the cost relatable to the machinery of windmill as such, was eligible for depreciation @ 80%. This position was continued by the Assessing Officer during the year under consideration. Similar is the position with regard to the cost of new windmill of ₹ 8,32,21,374/- installed during the year under consideration. In this manner, the depreciation claimed in the return of income of ₹ 6,86,23,735/- was reduced to ₹ 5,95,18,185/- thereby resulting in a disallowance of ₹ 91,05,550/-. 4. Assessee carried the matter before the CIT(A), who has allowed part r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission of windmill i.e. windmill installed in the preceding assessment year 2006-07 would be necessary as contained in para 2.5 of order of the CIT(A):- S.No. Date Nature of work Expenditure Rs. 1. 30-3-2006 Towards supply and installation of HT electrical Yard with VCB, outdoor type CT PT and HT Transmission Line from Windmill to Grid interconnection point including HT metering for 1.25 MW WINDMILL AT LOCATION No. K437 at above site address. 30,93,500/- 2. 30-3-2006 Labour charges towards final testing and commissioning for 1.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. (supra) as an integral part of the windmill cost and therefore, found to be eligible for depreciation equivalent to that of the windmill. No decision to the contrary has been brought to our notice and therefore, following the precedent in the case of Poonawala Finvest and Agro Pvt. Ltd. (supra), we do not find any infirmity in the action of the CIT(A) which we hereby affirm. 9. To the similar effect is the nature of cost enumerated in items no. 2 and 3 relating to labour charges for erection and installation of windmill. Such expenditure forms integral part of cost of the windmill and therefore, there is no mistake on the part of the CIT(A) to have considered such expenditure as eligible for depreciation at 80%. 10. In so f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
