TMI Blog2022 (4) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 32(1)(iia) to include the business of generation or generation and distribution of power, eligible for benefit under section 32(1)(iia). Although the said amendment is with effect from April 1, 2013 but it gives impetus to the view that generation of electricity is a manufacturing process and qualifies for the benefits under section 32(1)(iia). In view of the above, the order of the Commissioner of Income-tax (Appeals) is upheld and the appeal of the Revenue is dismissed being devoid of merit. The revenue has relied upon the decision of coordinate bench of Tribunal in assessee s own case for AY 2011-12 wherein the coordinate bench has confirmed the stand of Ld. CIT(A) on the ground that the business of generation, transmission or distribution of power was brought within the ambit of Section 32(1)(iia) of the Act, by the Finance Act, 2012 w.e.f. 01.04.2013 i.e., from the assessment year 2013-14. Another finding as rendered by the bench is that it is not the case of the assessee that the assessee is claiming the additional depreciation with respect to its manufacturing activities. We find that so far as the first finding is concerned, the same is not in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. VTM cited in 319 ITR 336 with that of the assessee's case. 4. It is submitted that the order of CIT(A) for the Asst. year 2011-12 on a similar issue was confirmed by the Hon'ble ITAT vide its order in 319, 2324, 442 2468/Mds/2016 dt. 10.7.2017. As evident, the sole subject matter of appeal is claim of additional depreciation. 2. The Ld. Sr. DR submitted that similar issue stood covered against the assessee by the decision of this Tribunal in assessee s own case for AY 2011-12, the copy of which has been placed on record. The Ld. AR, on the other hand, submitted that this issue is covered in assessee s favor by the decision of Hon ble High Court of Madras and Hon ble Supreme Court. The copies of the decisions have been placed on record. Having heard rival submissions, our adjudication would be as under. The assessee being resident corporate assessee is stated to be engaged in assembling and selling of windmills. Assessment Proceedings 3.1 The assessee s return of income was scrutinized u/s 143(3). However, the case was reopened on the ground that the assessee claimed deduction u/s 80IA in respect of windmill units treating it as a separate unit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of such provisions has been extended to power sector by Finance Act, 2012 by insertion of the words or in the business of generation or generation and distribution of power under these provisions with effect from 01.04.2013. The explanatory memorandum to Finance Bill provides as under: - Extending benefit of initial depreciation to the power sector Section 32(1)(iia) provides for allowance of initial depreciation (in addition to normal depreciation) at the rate of 20% of the actual cost on new machinery or plant (other than ships and aircraft) to the assessee engaged in the business of manufacture or production of any article or thing in the year of acquisition and instalment. Under the existing provisions, the benefit of initial depreciation is not available on the new machinery or plant installed by an assessee engaged in the business of generation or generation and distribution of power. In order to encourage new investment by the assessees engaged in the business of generation or generation and distribution of power, it is proposed to amend this section to provide that an assessee engaged in the business of generation or generation and distribution of power sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia). The Government vide Finance Act, 2012 has amended the provisions of section 32(1)(iia) to include the business of generation or generation and distribution of power, eligible for benefit under section 32(1)(iia). Although the said amendment is with effect from April 1, 2013 but it gives impetus to the view that generation of electricity is a manufacturing process and qualifies for the benefits under section 32(1)(iia). In view of the above, the order of the Commissioner of Income-tax (Appeals) is upheld and the appeal of the Revenue is dismissed being devoid of merit. This decision has been rendered after considering the decision of Hon ble High Court of Madras in CIT V/s Texmo Precision Castings (321 ITR 481); CIT V/s VTM Ltd. (187 Taxman 319); CIT V/s Hi Tech Arai Ltd. (321 ITR 477); the decision of Hon ble Supreme Court in the case of CST V/s Madhya Pradesh Electricity Board [1970] 25 STC 188 (SC) State of Andhra Pradesh v. National Thermal Power Corporation Ltd. 2002 (4) TMI 694 (SC). This decision has subsequently been followed by other benches of the Tribunal including in the decision of Kolkata Tribunal in Damodar Valley Corporation V/s DCIT (72 Taxmann.com 127) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2013-14. Another finding as rendered by the bench is that it is not the case of the assessee that the assessee is claiming the additional depreciation with respect to its manufacturing activities. 8. We find that so far as the first finding is concerned, the same is not in accordance with the cited decisions of Hon ble High Court of Madras. However, the second finding is vital one and the same would require concrete findings by the lower authorities. It has been observed by the bench that it is not the case of the assessee that the assessee is claiming the additional depreciation with respect to its manufacturing activities. If this finding is correct, the assessee would certainly be not eligible to claim additional depreciation in view of the fact that the assessee is engaged in manufacturing and selling of windmills. On the other hand, if the same run contrary, the assessee would be eligible to claim the depreciation in terms of aforesaid decisions. Therefore, we set aside the impugned order and restore the matter back to the file of Ld. AO to render a finding on the aspect that the additional depreciation was with respect to assessee s manufacturing activities. If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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