TMI Blog2019 (7) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... n of electricity would fall within the ambit of business of manufacture or production of any article or not issue appears to be no longer res integra and decided in favour of the assessee in CIT -Vs- NTPC [ 2019 (3) TMI 207 - DELHI HIGH COURT] . In the said case, the assessee was engaged in the production of thermal power and was held to be eligible to claim additional depreciation under Section 32(1)(iia). The Court took into consideration the decision of the Constitution Bench of the Honourable Supreme Court in State of A.P. -Vs- NTPC [ 2002 (4) TMI 694 - SUPREME COURT] wherein the Apex Court held electricity to be goods for the purpose of sales tax. Electricity is capable of abstraction, transmission, transfer, delivery, possession, consumption and use like any other movable property. Following the same logic, to deny the benefit of additional depreciation to generating entity on the basis of electricity is not an article or thing , is an artificially restrictive meaning of the provision and the benefit of additional depreciation under Section 32(1)(iia) has to be granted to the assessee. This decision will fully apply to the facts of the present case and consequentl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2005 and what was generated was less than one unit and the actual generation took place on 31.03.2004 and therefore, the wind mill cannot be stated to have been used by the assessee for the purpose of business. Since the claim for depreciation was rejected, the claim for additional depreciation was also rejected. The assessee preferred appeal before the Commissioner of Income Tax (Appeals)- II, Madurai [hereinafter referred to as CIT (A)]. 3. The CIT(A), by an order dated 27.12.2007 allowed the appeal in part viz., that the assessee is entitled for the claim for depreciation, but rejected the claim for additional depreciation, by relying upon the decision of the Chennai Tribunal in I.T.A.Nos.307/Mds/2000 dated 06.09.2005. The assessee filed an appeal as against that portion of the order, which was decided in favour of the revenue and the Revenue filed an appeal against that portion of the order, which was decided in favour of the assessee, and the assessee also filed cross objection. The tribunal, by the impugned order, rejected the case of the assessee in its entirety ie., it rejected the claim for depreciation and held that if the claim for dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer, but had referred to the aforementioned four decisions. In our considered opinion, all the four decisions cannot be applied to the facts of the present case. 6. In the case of B.Malini and Co., -Vs- CIT (1995) 214 ITR 192 (Bom), there was a gap of one clear previous year between installation of machinery and its usage and hence it was held that no depreciation can be claimed. In The Deputy CIT -Vs- Yellamma Dasappa Hospital (2007 290 ITR 353 Kar), the Court found that the machinery has not been actually put to use. In Dineshkumar Gulabchand Agrawal -Vs- CIT (2004) 267 ITR 768 (Bom), the assessee claimed depreciation upon the machinery being kept ready for use and not put to use. In CIT -Vs- Maps Tours and Travels (2003 260 ITR 655 Mad), no evidence was placed by the assessee before the Tribunal that the cars, which were purchased by them were used. Thus, we find that all the four decisions are not applicable to the present case and are on different set of facts and figures. 7. The case of the assessee before us strengthened in the light of the following decisions. In Principal CIT -Vs- Larsen Toubro Ltd., 403 ITR 248 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requiring the active employment or the actual working of a machinery, plant or building in the business. On the other hand, the wider meaning will include not only cases where the machinery, plant, etc., are actively employed but also cases where there is, what may be described as a passive user of the same in the business. An asset can be said to be in use when it is kept ready for use. 8. In CIT -Vs- Refrigeration Allied Industries Ltd 323 ITR 672 , the machineries were kept under good working condition so that it could be used at any moment, all expenses relating to the said machinery (cold storage) were allowed to be claimed as depreciation. In CIT -Vs-Shahbad Co-op Sugar Mills Ltd 12 Taxmann.com 421 (Punjab Haryana) , the machinery which was kept ready for use was held to qualify for depreciation under Section 32 of the Act. 9. The above decisions will clearly show that even trial production machineries kept ready for use etc., were considered to be used for the purpose of business to qualify for depreciation. In CIT -Vs- Geo Tech Construction 244 ITR 452 (Kerala) , the machinery which was purchased by the assess from Pondiche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd mills, the assessee was using wind energy for generating power for its capitative consumption apart from selling the surplus power generated to the Tamil Nadu Electricity Board. As far as application of Section 32(1)(iia) of the Act, is concerned, what is required to be satisfied in order to claim the additional depreciation is that the setting up of a new machinery or plant should have been acquired and installed after 31st March 2002 by an assessee, who was already engaged in the business of manufacture or production of any article or thing. The said provision does not state that the setting up of a new machinery or plant, which was acquired and installed upto 31.03.2002 should have any operational connectivity to the article or thing that was already being manufactured by the assessee. Therefore, the contention that the setting up of a wind mill has nothing to do with the power industry, namely, manufacture of oil seeds etc. is totally not germane to the specific provision contained in Section 32(1)(iia)of the Act. 12. Therefore, the said contention raised by Ms.Premalatha, learned Standing Counsel does not merit consideration. The next ..... X X X X Extracts X X X X X X X X Extracts X X X X
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