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TMI Blog2017 (8) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted on the following identical substantial questions of law:- "(I) Whether on the facts and circumstances of the case, the learned Tribunal was justified in holding that the additional depreciation of 20% on windmills u/s 32(1)(iia) of the Act is allowable even if windmills have not connection with the business activity of the assessee? (II) Whether in the facts and circumstances of the case, the learned Appellate Tribunal is justified in allowing assessee's plea that notwithstanding the non-acceptance of the decision of the Honourable Chennai High Court, the CIT has no jurisdiction to act under Section 263 under the garb of the AO having taken a 'permissible view' even though the facts indicate that the AO was in no po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal depreciation on windmills to the extent of Rs. 2.75 crores under Section 32(1)(iia) of the Act. In response, the respondentassessee pointed that the view taken by the Assessing Officer in his order dated 29.12.2008 was a possible view as allowing additional depreciation on windmills was in line with the decision of the Chennai Bench of the Income Tax Appellate Tribunal in the case of CIT .vs. Hi-Tech Arai Ltd. rendered on 12.12.2008. It was further pointed out that subsequent to the assessment order dated 29.12.2008 the view of the Tribunal in Hi-Tech Arai Ltd. (supra) was upheld by the Madras High Court as reported in CIT .vs. Hi Tech Arai Ltd. - (2010)321 ITR 477. Thus the exercise of jurisdiction under Section 263 of the Act was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s High Court in the High Tech Arai Ltd. (supra) to the Apex Court and it was pending. In the impugned order dated 27.05.2011, the Tribunal in fact quotes from the order dated 9.7.2010 of the Commissioner of Income Tax to the following effect: "since the matter has not reached finality and since the department is contesting the same, there is necessity for me to take remedial action u/s 263". The impugned order further records that the decision of the Madras High Court in Hi Tech Arai Ltd. (supra) completely concludes the issue in favour of the respondent-assessee on merits and, therefore, the respondent- assessee is entitled to additional depreciation on the windmills acquired and installed on or after 31.03.2002 under Section 32(1)(iia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged in the business of manufacture or production of any article or thing, a further sum equal to fifteen per cent of the actual cost of such machinery or plant shall be allowed as deduction under clause(ii): Provided........................................................." 9. At the very out set Mr. Dewani, learned counsel for the respondent- assessee points out that the S.L.P. CC Nos. 17111-17112/2010 from the order dated 01.09.2009 filed by the Revenue against the decision of the Madras High Court in Hi Tech Arai Ltd. (supra) had been dismissed by the Apex Court on 16.12.2010. Thus he submits that the issue now on merits stands concluded in favour of the respondent- assessee as the entire exercise by the Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy engaged in the business of manufacture or production of any article or thing. It is not necessary that the setting up of windmills acquired or installed on or before 31.03.2002 should have any operational connectivity to the article or thing which has already been manufactured by the assessee. 12. In the present case, it is not disputed by the Revenue that the respondent-assessee was engaged in the manufacture/processing of iron ore. Thus the requirements of the Section 32(1)(iia) of the Act are complied with by the respondent- assessee. In spite of being specifically asked, Mr. Parchure, learned counsel appearing for the revenue was not able to distinguish or point out as to why the decisions rendered by the Madras High Court in Hi Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Madras, Gujarat and Karnataka High Courts have taken a view that additional depreciation on windmills acquired and installed prior to 31.03.2002 is available under Section 32(1)(iia) of the Act. All that is required for allowing additional depreciation is that the assessee must be engaged in the manufacture or production of any article or thing, and such an assessee would on the setting up of a new machinery or plant would be entitled to additional depreciation on the new plant and or machinery under Section 32(1)(iia) of the Act. There is no requirement in Section 32(1) (iia) of the Act that additional depreciation on the new plant or machinery would be available only if the plant or machinery has some nexus/connection with the article ..... X X X X Extracts X X X X X X X X Extracts X X X X
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