9911796707
TMI Blog2014 (4) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... . noticed that the assessee has shown addition of WIP-Boiler and Turbine worth Rs. 12,73,96,254/-. The assessee stating that the aforesaid asset was installed before 30.09.2008 claimed depreciation @ 80% and additional depreciation of 20% by treating it as energy saving devices. Thus, total depreciation claimed was Rs. 12,73,96,254/-. It was claimed by the assessee that boiler was installed on 19.08.2008 and turbine was installed in September, 2008. As noted by the A.O., on search of internet he found out that the asset is a 3 MW Cogeneration Captive Power Plant consisting of Coal fired boiler with efficiency of 80% and turbines. He noticed that the starting date of claim for carbon credit under the fixed crediting methods as per the project documents submitted before the Competent Authority is shown as 01.11.2008. The A.O. was of the view that boiler and turbine are not two different assets but part of a cogeneration power plant. On examining the statement of fixed assets filed by the assessee, the A.O. noticed that the control panel for turbines worth Rs. 10,36,028/- supplied by M/s. Siemens Turbo Equipment Gmbh, who has also supplied the turbine, was put to use only on 06.10.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the bearing temperatures of turbine, oil temperature, exhaust pressure and live steam pressure. Control panel is also used for monitoring the data and for extra safety for the turbine from any abnormality. It was submitted that even without control panel power generation is possible and therefore, assessee has commenced power production during August 2008 after obtaining permission from the Inspector of Boilers, Government of Andhra Pradesh vide order dated 19.08.2008, it was submitted that commissioning schedule given by Siemens does not indicate utilization of control panel, therefore, even without control panel, the assessee was able to generate power. To controvert A.O's finding regarding no change in consumption of diesel and electricity till January, 2009, it was contended that in absence of control panel, the power plant was not used to its maximum capacity though it has commenced its operation. Only after the control panels were fitted, the power plant was used to its installed capacity. The CIT(A), however, did not accept the contentions of the assessee and confirmed the view of the A.O. by holding as under: 6. The assessment order, the submissions of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed by the x and hence, the addition is confirmed. 3. The Learned A.R. mostly reiterating the submissions made before the CIT(A) contended that the assessee has procured and installed all major components of the cogeneration plant like, the alternator, boiler, turbines etc., much prior to September 2008. Only the additional control panel which reached the premises of the company on 06.10.2008 was installed after September 2008. It was submitted that control panel does not form part of the manufacturing unit or the power generator's unit but is only required to observe the variations of heat in the process of production of power. It was submitted, even in absence of the control panel the assessee has commenced generation of power, though to a limited extent. In this context the Learned A.R. referred to the certificate issued by the Inspector of boiler, a copy of which is at page 62 of paper book. The Learned A.R. referring to the commissioning schedule, copy of which is at page 34 of paper book, submitted that the commissioning schedule of the supplier clearly indicates the commencement of operation of the power plant. The learned A.R. referring to the minutes of meeting w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in October 2008. It is the claim of the assessee that even in the absence of the control panel power plant can be operated and in fact was operated by commencing trial run, though not to its full capacity but at a lower level and power was generated. However, the A.O. has held that without control panel the power plant cannot be operated manually as the turbines are microprocessor controlled. The A.O. has also reasoned that there being no change in consumption of diesel and electricity till January 2009, assessee's claim that it has started generating power cannot be accepted. We find the reasoning of the A.O. acceptable as it is based on facts. It is a fact that the control panel was received by the assessee in October 2008 and fitted to the power plant thereafter. The assessee has not produced any documentary evidence or any certificate from technical expert to prove the fact that it is possible to even commence trial run manually in absence of the control panel. On the contrary, the minutes of meeting between the assessee and BHEL, a copy of which is at page 37 of paper book, does indicate that control panel has to be connected before the final alignment/commissioning. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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