TMI Blog2017 (3) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... made a disallowance which has been confirmed by the ld. CIT(A) in first appeal. Taking into consideration the facts, circumstances of the case and the written submission of the assessee, the assessee is directed to submit the details of investment made, own funds available and the availability of the same at the time of making investment relating to the linkage of the own funds before the AO. The AO is directed to provide adequate opportunity of being heard to the assessee in accordance with law - ITA No. 1018/ & 1019JP/2016, ITA No. 1098/JP/2016 - - - Dated:- 7-3-2017 - Shri Bhagchand, Accountant Member Assessee by : Shri Amit Kothari, CA Revenue by : Shri R.A. Verma, Addl. CIT - DR ORDER Per Bhagchand, AM The assessee has filed an appeal against the order of the ld. CIT(A)-2, Jaipur dated 21-09-2016 for the assessment year 2012-13. Further, the assessee and Revenue has filed the cross appeals against the order of the ld. CIT(A)-2, Jaipur dated 19-09-2016 for the assessment year 2013-13. The grounds of appeal raised by the assessee and the Revenue in the respective appeals are as under:- ITA No. 1018/JP/2016 Assessee (A.Y. 2012-13) 1. (a) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant. As noted in the assessment order, the assessee company had set up a windmill electric turbine generator in Feb. 2011. The Assessing Officer examined the claim of depreciation of ₹ 1,40,66,354/- which consisted of wind energy or windmill worth ₹ 2,71,82,555/- building and civil foundation work of ₹ 30,89,793/- and plant and machinery which consisted of electrical lines and installation of ₹ 48,93,538/-. The Assessing Officer after discussing the facts restricted the depreciation on the civil foundation work to be treated as building at 5% (50% of 10%) and electrical installation at 15% (50% of 30%) treating the same as plant and machinery In the present proceedings, it was submitted that in relation to depreciation on wind mill, installed items like concrete tower, converters and transformers, cable networking are also plant and machinery ad since specific rate of depreciation is provided for the wind mill, these items would also be eligible for the same rate of depreciation. Reliance was placed on various decisions on the issue. This issue came up in another case of M/s. Gangaur Exports for the assessment year 2012-13 wherein it had been held by pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Windmill would require scientifically designed machinery in order to harness the wind energy to the maximum potential. Such device has to be fitted and mounted on a civil construction, equipped with electric fittings in order to transmit the electricity so generated. Such civil structure and electric fittings, therefore, it can be well imaged, would be highly specialized. Thus, such civil construction and electric fitting would have no used other than for the purpose of functioning of the wind mill. On the other hand, it can be easily imagined that windmill cannot function without appropriate installation and electrification. In other words, the installation of wind mill and the civil structure and the electric fittings are so closely interconnected and linked as to form the common plant. As already noted, the legislature has provided for higher rate of depreciation of 80 per cent on renewable energy devises including wind mill and any specially designed devise, which runs on wind mill. The civil structure and electric fittings, equipments are part and parcel of the wind mill and cannot be separated form the same. The assessee's claim for higher depreciation on such in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve cannot be agreed to. Further the Circular gives the option to the assessee but in this case, the facts shows that the assessee itself was treating the loss as capital loss. As regards Section 43(5), it has certain conditions attracted as to what transactions cannot be treated as speculative. No details for the same were furnished. The stand of the Assessing Officer is confirmed and the ground of appeal is dismissed. 4.2 During the course of hearing, the ld. AR of the assessee prayed that the ld. CIT(A) has erred in not allowing the set off of loss on shares amounting to ₹ 8,34,916/-. The ld. AR of the assessee relied on the CBDT Circular No. 6/2016 dated 29th Feb. 2016. 4.3 On the other hand, the ld. DR relied on the orders of the authorities below. 4.4 I have heard the rival contentions and perused the materials available on record. It is noted that during the course of hearing the ld. AR of the assessee repeated the same arguments as made before the ld. CIT(A). In the appeal before this Bench, the ld. AR of the assessee submitted that details of loss on sale of shares were submitted before the authorities below (page15 to 18 of the paper book). The same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t agree with the same as no details of availability of funds with details of investment and their linkage to own funds was provided. The provisions of Section 14A were invoked and a disallowance of ₹ 68,559/- was made. In the present proceedings, the submissions made before the Assessing Officer have been reiterated. However, no details of investment made, own funds available and the availability of the same at the time of making the investments has been demonstrated. The disallowance made by the Assessing Officer is confirmed. Ground of appeal is dismissed. 7.2 During the course of hearing, the ld. AR of the assessee prayed for deletion of addition of ₹ 68,559/- sustained by the ld. CIT(A) by invoking the provisions of Section 14. The ld. AR of the assessee filed the written submission to this effect as under:- The AO made addition of ₹ 68,559/- on the basis of certain investments made in shares and Mutual Fund by invoking Section 14A which has been confirmed by the ld. CIT(A). The assessee had claimed that no expenditure was required to be incurred as such no disallowance was warranted. Further the interest net was only ₹ 10,914/- (paid ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd No. 2 of the assessee is allowed for statistical purposes. 8.1 The Ground No. 3 of the assessee is regarding not allowing set off of loss of ₹ 36,778/- claimed as business loss by treating the same as capital loss. 8.2 After hearing both the parties and perusing the materials available on record, it is noted that the similar issue was raised by the assessee in A.Y. 2012-13 which has been dismissed by this Bench in assessee's own case in ITA No. 1018/JP/2016. Since, the decision has been taken against the assessee in assessee's own case for the assessment year 2012-13, therefore, the same result shall apply mutatis mutandis in assessee's own case for the assessment year 2013-13. Thus Ground No. 3 of the assessee is dismissed. In the result, the appeal of the assessee is partly allowed for statistical purposes. 9.1 The grounds of appeal of the Revenue for the A.Y. 2013-14 is taken up for adjudication as under:- 1. Whether on the facts and in the circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition of ₹ 22,94,27/- made by the AO on account of disallowance of depreciation on windmill ignoring the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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