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The Commissioner of Income Tax-1, Pune Versus CTR Manufacturing Industries Ltd.

2016 (4) TMI 265 - BOMBAY HIGH COURT

Depreciation claimed on Windmill - Held that:- Both the CIT(A) as well as the Tribunal have recorded a finding of fact that the items listed at (a) to (d) in paragraph(3) [i.e (a) Power Evacuation Infrastructure, (b) Erection and commissioning charges,(c) Line work &(d) Electrical items] above form an integral part of the Windmill. Thus, entitled to 80% depreciation being a part of a Windmill.

Depreciation on cost of civil foundation - Held that:- As is agreed position between the par .....

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iled by the Revenue under Section 260A of the Income Tax Act, 1961( the Act ) takes exception to the order dated 31st January, 2013 passed by the Income Tax Appellate Tribunal ( Tribunal ). The Assessment Year involved is 2007-2008 2 Although the Memo of appeal raises three questions, Mr. Suresh Kumar urges only the following two questions of law for our consideration: (1) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing depreciation @8 .....

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ing structure and not part of the Windmill; hence the eligible rate of depreciation is 10% only? The brief facts giving rise to the present controversy are that: 3 For the subject assessment year, the Respondent-assessee had filed its return of income declaring an income of ₹ 3.83 Crores, after taking into account depreciation claimed on Windmill. The Respondent-assessee had capitalized the cost of its Windmills @Rs.6.55 Crores and claimed depreciation thereon @80% i.e. ₹ 5.12 Crores .....

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led to depreciation @80% as they are not a part of the Windmill. Thus, allowing depreciation @10% with regard to the cost of civil work foundation for the Windmill listed at (i) above and depreciation of 15% on all the other items listed at (a) to (h). Thus, the Assessing Officer disallowed the claim of ₹ 92.58/lakhs and restricted the depreciation to only ₹ 4.20 Crores as against ₹ 5.12 Crores claimed by the Respondent-assessee. 4 Being aggrieved, the Respondent-assessee filed .....

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ieved, both the Appeallant-Revenue as well as the Respondent-assessee preferred appeal to the Tribunal. The Tribunal, by the impugned order negatived the appeal of the Revenue by holding that the items listed at (a) to (d) in paragraph(3) above were necessary parts for a Windmill and supported generation of power. Thus, upheld the order dated 10th February, 2011 of the CIT(A) allowing depreciation @80% on the aforesaid items at (a) to (d) of paragraph(3) above. So far as the appeal of the Assess .....

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antified on allocation. So far as civil foundation listed at item (i) in paragraph(3) above is concerned, the impugned order of the Tribunal follows the decision of this Court in the case of the Commissioner of Income Tax-III, Pune v/s Cooper Foundary Pvt Ltd (Income Tax Appeal No.1326 of 2010 rendered on 14th June,2011), wherein the depreciation in respect of civil foundation was allowed @80%. 6 The Revenue being aggrieved with the impugned order of the Tribunal is in appeal before us raising t .....

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