TMI Blog2012 (8) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, the Ld. CIT(A) erred in deleting the addition of ₹ 38,62,288/- being additional depreciation on wind mill, overlooking the fact that installation of the wind mill had no connection with the core manufacturing activity of the appellant and it also did not qualify as plant and machinery used in manufacturing activity of the appellant. 3. Ld. D.R. supported the assessment order whereas Ld. A.R. supported the order of Ld. CIT(A). 4. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. WE find that this issue has been decided by Ld. CIT(A) as per para 3.2 of his order which is reproduced below for the sake of ready reference: 3.2 I h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Wind Mil! did not have connection with core manufacturing activities of the appellant. Additional depreciation u/s.32(l)(iia) is admissible in respect of new plant and machinery acquired and installed by an assessee engaged in the business of manufacturing or production of any article or thing. The machinery in question, i.e. Wind Mill generated electricity, which was supplied to GEB, which allowed set off for the units supplied in the electricity bill of the appellant. Power generated by the Wind Mill was therefore, indirectly used in appellant's business of manufacturing only. Under section 32(l)(iia), there is no requirement that the new machinery should be used only for core manufacturing activity. Without prejudice, as held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty has been dispensed with. Under this factual position, we do not find any reason to interfere in the order of Ld. CIT(A) on this issue. This ground of the revenue is rejected. 6. In the result, appeal of the revenue is dismissed. 7. Now, we take up the C.O. filed by the assessee. The only ground raised by the assessee in the C.O. reads as under: The Ld. CIT(A) has erred in confirming disallowance of ₹ 14,92,949/- by invoking provisions of section 14A of the Income tax Act, 1961. Your appellant submits that the provisions of section 14A are not applicable and hence disallowance made is unjust and uncalled for. It be held so now and the addition made be deleted. 8. It was submitted by the Ld. A.R. that the assessee has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odrej Boyce Manufacturing Pvt. Ltd. VS DCIT as reported in 194 Taxman 203. We also find force in this contention of Ld. A.R. that no interest bearing borrowed funds were used for making the investment in shares and we also find that out of the total disallowance of ₹ 14,92,949/- made by the A.O., disallowance of ₹ 13,14,775/- is out of the interest expenditure which cannot be made unless interest bearing borrowed funds are used for investment in shares and hence, to this extent, the disallowance is deleted. Balance disallowance of ₹ 1,78,174/- has been made out of administrative expenses to the extent of 0.5% of the average investment of ₹ 356.35 lacs. We find that as per the balance sheet submitted before us, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
