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TMI Blog2017 (3) TMI 1468X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Rajasthan High Court in the case of K.K. Enterprises. 2. The disallowance of additional depreciation on such civil work foundation by not treating the same as part of the wind mill. 3. The ld. CIT(A) has erred in not allowing set off loss on shares amounting to Rs. 8,34,916/- claimed as business loss. The ld. CIT(A) ld. CIT(A) has erred in sustaining the action of the AO in treating the same as short term loss while denying set off against other income. ITA No. 1019/JP/2016 - Assessee (A.Y. 2013-14) ''1. (a) The ld. CIT(A) has erred in not allowing higher depreciation civil foundation work and has erred in not treating the same as part of the wind mill cost. (b) The ld. CIT(A) has also erred in not appreciating the fact that the said issue was fully covered by the decision of Hon'ble Rajasthan High Court in the case of K.K. Enterprises. 2. The ld. CIT(A) has erred in sustaining addition of Rs. 68,559/- by invoking Section 14A. 3. The ld. CIT(A) has erred in not allowing set off of loss of Rs. 36,778/- claimed as business loss by treating the same as capital loss ITA No. 1098/JP/2016 - Revenue (A.Y. 2013-14) 1. Whether on the facts and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order). In view of the above, and following the decision of the ITAT on this issue this ground of appeal is partly allowed. Ground No. 2 4.3 I have perused the facts of the case, the assessment order and the submission of the appellant. The AO has allowed the additional depreciation claimed by the assessee which had been claimed at 50% in the previous year. However, due to applicability of different rates of depreciation by the assessee and Assessing Officer on the wind mill itself, there is a difference of amount of Rs. 3,08,979/- which has not been allowed by Assessing Officer. In view of the ground 1 where the issue of rate of depreciation on wind mill has been discussed, this modified. The Assessing Officer to accordingly modify the quantum of additional depreciation. This ground of appeal is partly allowed. 3.2 During the course of hearing, the ld. AR of the assessee relied on the decision of Hon'ble Rajasthan High Court in the case of CIT vs. K.K. Enterprises (2014) 108 DTR 0109 (Raj) praying therein that both the grounds i.e. 1(a), (b) and 2 are covered by the decision of Hon'ble Jurisdictional High Court in which Hon'ble Court held that civil structure a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee are allowed. 4.1 Apropos Ground No. 3 of the assessee, the facts as emerges from the order of the ld. CIT(A) is as under:- ''5.3 I have perused the facts of the case, the AO and the submissions of the appellant. The Assessing Officer on examination of the balance sheet and relevant documents and submissions made by the assessee observed that assessee company claimed short term loss on sales of shares of Rs. 8,24,443/- as business loss, Rs., 5,914/- other charges on shares and Rs. 4,559/- on STT on shares totaling to Rs. 8,34,916/-. This short term loss on shares had been shown as expenses in profit and loss account while the AO opined that the company is engaged in the business of manufacture of emery flour mills, mills stone, machinery etc. and shares held at the end of F.Y. 31st March 2012 as current investments. Further, in the Audit Report on quantitative details of shares traded was reported. It was further seen that the assessee himself has claimed the same to be short term capital loss in the letter written on 12-12-2014 and business loss in letter dated 13- 03-2015. The Assessing Officer based on the above treated the loss as short term capital loss under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med as business loss by the assessee. Thus Ground No. 3 of the assessee is dismissed. In the result, the appeal of the assessee is partly allowed. 5.1 The appeal of the assessee for the assessment year 2013-2014 is taken up for adjudication. 6.1 The Ground No. 1(a) and (b) of the assessee is as under:- ''1. (a) The ld. CIT(A) has erred in not allowing higher depreciation civil foundation work and has erred in not treating the same as part of the wind mill cost. (b) The ld. CIT(A) has also erred in not appreciating the fact that the said issue was fully covered by the decision of Hon'ble Rajasthan High Court in the case of K.K. Enterprises. 6.2 I have heard the rival contentions and perused the materials available on record. This issue has been decided in favour of the assessee by this Bench in assessee's own case for the assessment year 2012-12 in ITA No. 1018/JP/2016 (supra). Thus the decision taken therein shall apply mutatis mutandis in assessee's own case in ITA No. 1019/JP/2016 for the assessment year 2013-14. Hence, the Ground No. 1(a) and (b) of the assessee is allowed. 7.1 The Ground No. 2 of the assessee is regarding sustaining the addition of Rs. 68, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are capital of Rs. 19,75,000/- and reserves of Rs. 2,14,50,556/- which adequately covers the investments made. Reliance is placed on following decisions. (a) DCIT vs. Cosmos International Ltd. (2014) 41 CCH 32 (b) Bharat Shantilal Kadakia vs. ITO (2013) 35 CCH 352 (c) CIT vs. Gujarat Power Corporation (2013) 352 ITR 583 (d) CIT vs. Suzlon Energy Ltd. (2013) 354 ITR 630 (Guj) (e) CIT vs. Deepak Mittal (2013) 361 ITR 131 (P&H)'' 7.3 The ld. DR relied on the orders of the authorities below. 7.4 I have heard the rival contentions and perused the materials available on record. The AO during the course of assessment proceedings observed that the assessee had earned dividend income of Rs. 1,73,404/- while an expenditure of Rs. 6,77,136/- was during the year. During assessment proceedings, the ld. AR of the assessee explained that Section 14A of the Act are not applicable as some investments and advances wee interest bearing and also that the assessee had a share capital of Rs. 19,75,000/- and reserves of Rs. 2,14,50,506/- which adequately covers such advances and investment in shares. The AO did not agree with the submissions of the assessee as no details of availability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der:- ''I have heard the rival contentions and perused the materials available on record. It is noted that the issues raised by the assessee are covered by the decision of Hon'ble Jurisdictional High Court in the case of CIT vs. K.K. Enterprises wherein the observation of the Hon'ble Court is as under:- ''Held:- The issue involved in these appeals has been considered by the Hon'ble Gujarat High Court in Tax Appeal No. 604/2012 decided on 29-1-2013, in Commissioner of Income Tax, Ahemdabad-III vs. Parry Enginerng and Electronics (P) Ltd. In the case aforesaid Hon'ble Gujarat High Court held 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 func ..... 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