TMI Blog2009 (4) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... after, a survey was carried out u/s. 133A of the Act by the ADIT Unit-IX [3] Mumbai on 06.07.2005 wherein certain information was gathered the report of which was given by the ADIT [Inv.] Unit-IX[3] and the same has been summed up by the AO in the impugned assessment order as under: 1. the name of the purchaser had been inserted afterwards in the delivery challan of March, 2002, stated to be for the windmill purchased by the assessee. Two delivery challans were found bearing the same serials number. 2. on verification of the documents furnished by the MSEB and MEDA, it was seen that officer responsible for certifying commissioning of the wind mill had not traveled to the site of installation in March, 2002, thus, the commissioning certificate issued by the MSEB does not appear to be correct. 3. stated generation of electricity by the wind mill in March, 2002 is only 14kwh. In the month April, May, June and July, 2002, the same is 25740kwh, 204580 kwh, 226810 kwh and 287040 kwh respectively. The lesser amount of generation of electricity in April 2002 [25740 kwh against monthly average of more than 2 lakhs clearly indicates that the wind mill had started generating-ele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed fully and truly all material facts necessary for his assessment which is also evident from para-2 of the assessment order passed u/s. 143[3] that the assessee has filed complete details including the copy of purchase order of land at Varkarwadi [Satara] and copy of debit note of loan account and wind mill project. He further submits that the AO after examining the same has allowed depreciation to the assessee in the assessment made u/s. 143[3] of the Act. He further submits that the AO was not justified to issue notice u/s. 148 on the same set of facts which were already disclosed and available on record and hence it is a case of mere change of opinion of withdrawal of depreciation already allowed to the assessee. Therefore, the proceedings initiated u/s. 148 and assessment completed are not valid in law and liable to be quashed. 7. On merits, the ld. counsel for the assessee submits that the assessee has filed wind mill reading sheet from MSEB appearing at pages 11-13 of the assessee's paper book, affidavit before the Maharashtra Electricity Regulatory Commission, Mumbai appearing at pages 14-18 of the assessee's paper book, certificate of commissioning dated 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 147 of the Act. There is no material on record to show that the AO while allowing the depreciation in the original assessment has examined the issue of depreciation in detail or that the assessee has filed complete details thereof inasmuch as, at the time of hearing, it has been submitted by the ld. counsel for the assessee that the details of meter reading sheet by MSEB were filed for the first time before the CIT[A] showing that the electricity was generated on 30.03.02 and supplied to the MSEB. In this view of the matter we are of the view that the ld. CIT[A] was fully justified in upholding the action of the AO in initiation proceedings u/s. 147 of the Act and completion of reassessment. 10. The two requisites for depreciation allowance u/s. 32 of the Act are that the depreciable asset is owned wholly or partly, by the assessee and used for the purpose of the assessee's business . In the case of the assessee, we find that the ld. CIT[A] while sustaining the disallowance of depreciation on wind mill has concluded at page 8 of his order that the machinery was under trial and there is no force behind the claim that on the 30th and 31st March, itself the wind mill was put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 133 [Guj], it has been held at page 133 head-note: .......Even trial production of a machinery would fall within the ambit of used for the purpose of business. Further, as the statute does not prescribe the minimum time limit for use of the machinery, the assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for a very short duration for trial run. 15. In CIT vs. Union Carbide [I] Ltd. [2002] 254 ITR 488 [Cal] it has been held at page 489 [head-note] that: .....Thus, the trial production was quite sufficient to claim both depreciation and investment allowance 16. In Omkar Textile Mills [P] Ltd. vs. ITO [2008] 115 TTJ [Ahd. Tribunal] 716, it has been held that in view of certificate of Gujarat Energy Development Agency GEDA], sales tax exemption certificate, eligibility certificate commissioning certificate and quick test report issued by GEDA and letter of NEPC-MICON evidencing that Wind Turbine Generating set was commissioned on 27th March, 1995 and test run was also undertaken, the assessee was entitled to depreciation. 17. In the light of the above documentary evidences and the ratio of above decisions, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material available on record. We find that the claim of the assessee was disallowed by the AO on the ground that the assessee has failed to explain as to why the rent paid to Mr. Y. Birla was wholly and exclusively for the purpose of its business. On appeal, the ld. CIT[A] observed that the premises at Alibaug is maintained as a guest house. The expenditure in respect of the guesthouse, in whatever name called is not allowable as business expenditure. The claim that the place is being used for conference is not adduced by any evidence and has been forwarded just in a routine manner. The taking of Mr. Y. Birla farmhouse as a caretaker a exchange of monthly rent is in itself not clear from doubt. Even if the company had validly taken the property on lease it is quite apparent that the premises are being used exclusively as guest house, the rent of which is not allowable as business expenditure, following the decisions in Britannia Industries Lts. vs. CIT 278 ITR 546 [SC] and Raja Bahadur Motilal Poona Mills Ltd. vs. CIT [1995] 212 ITR 175 [Bom]. In the absence of any contrary material placed on record by the assessee against the finding of the ld. CIT[A] and keeping in view that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
