TMI Blog2021 (5) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... cquired and installed on or before 31.03.2012 and assessee has became second owner and has not dismantled from one place and reerected in another place, the interpretation given by the Assessing Officer and learned CIT(A) are contrary to the provisions of Rule 5 of Income Tax Rules,1962. Hence, we set aside the order of the learned CIT(A) and direct the Assessing Officer to allow depreciation @ 80% on windmills as claimed by the assessee. Appeal filed by the assessee is allowed. - I.T.A.No.581/Chny/2019 - - - Dated:- 28-4-2021 - Shri Mahavir Singh, Vice-President And Shri G.Manjunatha, Accountant Member For the Appellant : Mr. N.V.Balaji, Advocate For the Respondent : Mr.Suresh Periasamy,JCIT ORDER PER G.MANJUNATHA, AM: This appeal filed by the assessee is directed against the order of the learned CIT(A)-1, Coimbatore dated 21.01.2019 and pertains to assessment year 2015-16. 2. The assessee has raised following grounds of appeal:- 1. The order of the Hon ble Commissioner of Income tax (Appeals) is opposed to law, facts and circumstances of the case and against the principles of natural justice. 2. a) The Hon ble Commissioner of Income Tax ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as such its claim of 80% is in order. 4.1 However, the intention of the legislation is that wind mills purchased after 31/03/2012 are eligible for 15% depreciation only. It does not distinguish between new purchase vis- -vis second hand purchase i.e pre installed wind mills) 4.2 The assessee contended that the asset during the relevant period does not fall within the 15% Block of Plant Machinery as it has purchased pre installed WTGs during F.Y.2013-14. However as per the provisions of the Act, there cannot be 80% block in respect of wind mills purchased during F.Y.2013-14, except those already existing in the books. As per the amendment in this regard, no fresh 80% block can he created just because the wind mills are second-hand and pre-installed. So for the assessee, during the material year F.Y,2013-14, a fresh block @ 15% comes into existence, As such in the instant case, it is a new. block coming into existence. 4.3. Further the assessee s contention is that only newly installed WTGs are covered by the notification is not tenable because the intent of the legislature vide the said Notification is amply clear, The subsequent reversal of depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In Gursahai Saigal v. CIT [1963] 48 ITR (SC) , it has been held that the rule of strict construction applies primarily to charging provision in a taxing statute and has no application to a provision not creating a charge for the tax but laying down the machinery for its calculation or procedure for its collection and such machinery provisions have to be construed by the ordinary rules of construction. One important consideration in construing a machinery section is that it should be so construed as to effectuate the liability imposed by the charging section and to make the machinery workable. 5.3 In light of the above, depreciation at enhanced rate @80% on wind mills because it is Pre-installed is not in consonance with the legislative intent vis- -vis amendatory notification. Accordingly for this A.Y.2o15-16, the WDV. as on 31.03.2015 is reworked by adopting 15% depreciation for windmills. 6. After re-computation for AY.2014-15 , the eligible depreciation (on all assets) for AY.2015-16 is found to be in excess - ( ` 769,30,161/- - ₹ 3,28,03,324/-) by ` 4,41,26,837/-. This has to be disallowed for A.Y.2015-16. 7. The assessee has claimed deprec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed date, then rate applicable for period when asset was installed should be allowed irrespective of the fact that asset is transferred to another person. In this case, the assessee has purchased windmills which were purchased and installed before 31.3.2012 hence, eligible for 80% depreciation which is supported by notification issued by CBDT vide Notification No.15/2012 dated 30.03.2012. 6. The learned DR, on the other hand, supporting the order of the learned CIT(A), submitted that as per amended provisions of Appendix-I Part A , rate of depreciation has been changed from 80% to 15% on windmills acquired and installed after 01.04.2012. Since the assessee has acquired windmills in the financial year 2013-14, rate of depreciation applicable to that period was 15% and hence, there is no error in the findings of the Assessing Officer to restrict the depreciation to 15% instead of 80% claimed by the assessee. 7. We have heard both the parties, perused the material available on record and gone through the orders of authorities below. The rates for claiming depreciation under the Income Tax Act for various block of assets is specified under Rule 5 of Income Tax Rules,1962, read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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