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TMI Blog2019 (8) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... venue has proposed the following substantial question of law for the consideration of this Court:- (i) Whether on the facts and in circumstances of the case and in law, the Income Tax Appellate Tribunal is right in deleting the disallowance of additional depreciation claimed by the assessee u/s.32(1)(ii)? 3. It is not in dispute that the assessee is in the business of generation of power. The assessee claimed the additional depreciation of Rs. 1,11,25,307/on the power plant and electric installations. The Assessing Officer declined to grant such additional depreciation taking the view that plants and machinery are covered under section 32(1)(i) of the Act, on which, normal depreciation is allowable. The Assessing Officer took the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is production of article or thing. Further, Delhi Tribunal in case of NTPC Ltd. Vs.DCIT (2012) 54 SOT 177 wherein assessee's claim of additional depreciation was disallowed on the ground that power/ electricity generated by assessee could not be equated with an article or thing which was being manufacturing in an industrial undertaking, held that if there can be sale and purchase of electric energy like any movable object, then electric energy is covered by the definition of goods and thus admissibility of additional depreciation could not be denied to assessee merely on the ground that electricity is not an article and thing. In view of the said decisions, P&M acquired and installed by assessee for generation of electricity is akin to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petus to the view that generation of electricity is a manufacturing process. In light of above, the assessee is held entitled to the additional claim of depreciation on plants and machinery installed in the Captive Power Plant. Hence, the Ground No.2 of appeal of the assessee is allowed. 8. The issue raised by the Revenue is no longer resintegra in view of a decision of the Delhi High Court in the case of Principal Commissioner of Incometax, New Delhi Vs. NTPC Sail Power Co. (P.) Ltd. reported in [2019] 103 taxmann.com 398 (Delhi). 9. The Delhi High Court in NTPC Sail Power Co. (p.) Ltd (supra) relied upon the decision of the Supreme Court in the case of State of Andhra Pradesh Vs. NTPC Ltd. reported in AIR 2002 SC 1895. The Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a product of the assessee company. It is covered under the words "article" or "thing", which is tradable / identifiable. In other words, the electricity falls within the definition of Sale of Goods Act, 1930, and process of generation of electricity is akin to manufacture or production of an "article" or "thing". The power generated need not necessarily be used in the production of assessee's own products namely mining and extraction of gold. The use of electricity in the manufacturing activity of the core business of the assessee is not a precondition for the grant of additional depreciation under the statute. Therefore, we do not see any merit in this appeal. Accordingly, this appeal is rejected. 4. However, we have not gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because electrical energy is not tangible or cannot be moved or touched like, for instance, a piece of wood or a book it cannot cease to be moveable property when it has all the attributes of such property. It is capable of abstraction, consumption and use which if done dishonestly is punishable under Section 39 of the Indian Electricity Act, 1910. If there can be sale and purchase of electrical energy like any other moveable object, this Court held that there was no difficulty in holding that electric energy was intended to be covered by the definition of "goods". However, A.N.Grover, J., speaking for threeJudge Bench of this Court went on to observe that electric energy "can be transmitted, transferred, delivered, stored, possesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of power have expressly been included in the ambit thereof. 10. This Court in the case of Commissioner of Incometax1 Vs. Diamines & Chemicals Ltd. reported in [2014] 42 taxmann.com 193 observed in Para3 as under:- 3. Heard Shri K.M. Parikh, learned Counsel appearing on behalf of the revenue and perused the impugned judgement and order passed by the ITAT. At the outset, it is required to be noted that the assessee claimed the deduction under Section 32(1)(iia) of the Income Tax Act with respect to the cost incurred by it for installation of the Wind Electric Generator. The Assessing Officer disallowed the same and made the addition of Rs. 1,17,98,030/by observing that as the assessee is not in the business of generation and distri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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