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2016 (3) TMI 1129 - ITAT PUNE

2016 (3) TMI 1129 - ITAT PUNE - TMI - Disallowance of depreciation on the cost of foundation/ installation of the windmill - Held that:- We find that the controversy in the present case is squarely covered by the recent decision of the Pune Bench of the Tribunal in the case of Shreem Electric Limited vs. JCIT [2015 (11) TMI 1607 - ITAT PUNE] that the expenses incurred on erection & commissioning, civil work, etc. being necessary adjunct to the windmill and is not meant for any other purposes oth .....

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d that the capital expenditure incidental to the windmill has to be tested on the touchstone of the functional test and the assessee will be entitled to higher rate of depreciation on such incidental expenditure, if it has no other use except for power generation done by the windmill. - Decided in favour of assessee - Disallowance on account of element of personal user towards vehicle repairs and maintenance, telephone expenses and travelling expenses, etc. on estimated basis - Held that:- I .....

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company is concerned. Such usage of facilities at any rate can be possibly taxed in the hands of the user as perquisite alone. Therefore, no estimated disallowance on account of personal user is called for.- Decided in favour of assessee - ITA No. 1293/PN/2013 - Dated:- 31-3-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM. Appellant by : Shri S. V. Deshpande Respondent by : Shri Dheeraj Kumar Jain ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal filed by the assessee is agai .....

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thout properly appreciating the explanation filed. 2. While confirming the disallowance of depreciation amounting to ₹ 10,12,043/-, the learned CIT(A) conveniently ignored the copies of the appellate order passed by the CIT (A) in similar type of case and also ignored the decisions of the ITAT and of the Bombay High Court when copies of those decisions were filed before him on 19th of March, 2013 and when the said decisions were directly on the issue involved. 3. The learned CIT(A) further .....

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his appeal, the first issue by way of Ground Nos.1 & 2 relates to the disallowance of depreciation of ₹ 10,12,043/- on the cost of foundation/ installation of the windmill. 4. Briefly stated, the relevant facts concerning the issue are that the assessee is a company and engaged in the business of export of fruits and vegetables. During the year under consideration, the assessee has set up nonconventional wind power generation unit. The total cost of the windmill was ₹ 3,60,74,328 .....

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80% applicable to windmills whereas depreciation of 10% is allowable in respect of civil work and depreciation @ 15% was allowable on the cost of installation and commissioning. The assessee has objected to this observation and claimed higher rate of 80% available on the entire plant relying on the decision in the case of Poonawala Finvest and Agro Pvt. Ltd. vs. ACIT, 12 DTR 211 by ITAT, Pune. The assessee also relied on decision of the Hon ble Supreme Court in the case of CIT vs. Karnataka Powe .....

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tent of ₹ 10,12,043/- in aggregate. Against the aforesaid disallowance, the assessee carried the matter before the Tribunal. 6. The Ld. Authorized Representative for the assessee reiterated the submissions made before the CIT(A). The Ld. Authorized Representative for the assessee further relied upon the decision of the Hon ble Bombay High Court in the case of CIT vs. Cooper Foundary Pvt. Ltd. in Income Tax Appeal No.1326 of 2010, order dated 14.06.2011 (order of copy filed) wherein the Hon .....

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sue in favour of the assessee. The relevant extract of the order of the Tribunal on the issue is reproduced hereinbelow :- 8. We have carefully considered the orders of the authorities below and submissions made on behalf of the revenue. The only issue for adjudication before us is allowability of similar depreciation rate as applicable to windmills, also to the foundation & civil work and erection & commissioning work executed for these windmills. It is the case of the assessee before t .....

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dmill, depreciation on the same should be provided at the rate applicable to windmill. We find that the aforesaid assertions made on behalf of the assessee before the Revenue remains uncontroverted. Accordingly, We are of the firm view that the expenses incurred on erection & commissioning, civil work, etc. being necessary adjunct to the windmill and is not meant for any other purposes other than for operational functioning of wind turbine and therefore cannot be treated differently. Therefo .....

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