9911796707
TMI Blog2014 (1) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this appeal, the Revenue has raised the following Grounds of Appeal :- "1. On the facts and in the circumstances of the case the Commissioner of Income-tax (Appeals) 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 requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2006-07. In the assessment years 2007-08 and 2008-09, the Assessing Officer disallowed a portion of the depreciation allowable on windmill @ 80% on 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 Rs. 8,32,21,374/- installed during the year under consideration. In this manner, the depreciation claimed in the return of income of Rs. 6,86,23,735/- was reduced to Rs. 5,95,18, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered the rival submissions. In order to appreciate the dispute, the following break-up of expenses on account of erection and 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 1.25 MW windmill at Loc No. K437. 1,10,200/- 3. 30-3-2006 Towards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 far as the cost towards processing fee and MEDA application fee of Rs. 2,58,970/- and Rs. 6,28,750/- respectively in items no. 4 and 5 are concerned, 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 fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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