TMI Blog2022 (6) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... be contended by the Ld.DR. The windmills installed on or before 31/03/2012 continued to be eligible for the benefit of higher depreciation @80% even for AY 2013-14 and the subsequent years and there is nothing to show or even suggest the said benefit was withdrawn or discontinued from AY 2013-14 onwards. Since the windmills on which higher depreciation @80% was claimed by the assessee for the year under consideration had been undisputedly installed by the assessee on or before 31/03/2012, we are of the view that the assessee-company was entitled for higher depreciation @80% on the said windmills for the year under consideration and there being no error in the order of the Assessing Officer passed u/s.143(3) allowing depreciation at higher rate of 80% on the said windmills, the Ld. Pr.CIT is not justified to revise the same vide his impugned order passed u/s.263 of the Act. In view of that matter, we set aside the impugned order passed by the Ld. Pr.CIT u/s.263 of the Act and restore that of the Assessing Officer passed u/s.143(3) of the Act. Appeal of assessee allowed. - ITA No.417/Ahd/2020 - - - Dated:- 15-6-2022 - Shri Pramod M. Jagtap, Vice President And Shri T.R. Senthil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revised its return on 30.03.2017 without altering its income. The case was selected for scrutiny and the assessment procedure was completed on 26.12.2017 at the assessed income of Rs.(-)11,88,92,509 and the revised book profit u/s.115JB was Rs.419,53,31,478/-. Scrutiny of income tax return of the assessee revealed that the assessee had availed 80% depreciation of Rs.99,07,514 on written down value of Rs.123,84,392 on the first day of previous year of wind mill instead of depreciation of Rs.18,57,659 allowable at the rate of 15%. This has resulted in excess deduction of depreciation of Rs.80,49,855/- and consequent potential tax effect of Rs.27,36,1456/-. It is, therefore, seen that necessary inquiries on the aforementioned issue were not conducted by the Assessing Officer during the assessment proceedings, which has rendered the assessment order passed by the A.O. u/s.143(3) of the Act, erroneous and prejudicial to the interest of revenue. 3. The Ld. Pr.CIT accordingly issued a notice u/s.263 of the Act on 24/02/2020 pointing out the above error to the assessee and seeking its explanation in the matter. In reply, the following submission was filed by the assessee in writi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.CIT did not find merit in the submission made on behalf of the assessee for the following reasons given in paragraph No.4 of impugned order: 4. The submissions made by the assessee also the facts of the case have been carefully considered. The CBDT vide Notification No.15/2012 [F.No.149/21/2010-SO(TPL)] S.O. 694(E), dated 30-3-2012, revised depreciation rate on Windmills by making amendment in the Table, in the New Appendix I of the Income Tax Rules, 1961. After change, restricted depreciation of 80 per cent was available on windmills installed on or before 31st day of March, 2012. The CBDT, thereafter, vide Notification No.43/2014 [F.NO.152/1/2013-TPL]/SO 2399(E), dated 16-9-2014, made amendment in the New Appendix 1 of IT Rules by inserting the words installed on or after the 1st day of April, 2014: in place of installed on or before 31st day of March, 2012 . Thus, depreciation on windmills installed before 1 April 2014 is available at the rate of 15 per cent only. The assessee had availed 80% depreciation of Rs.99,07,514 on written down value of Rs.123,84,392 on the first day of previous year of wind mill instead of depreciation of Rs.18,57,659 allowable at the rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Asset cannot be stretched to an extent where it leads to an absurdity. Besides, as mentioned earlier the windmills fall in the category of assets of an undertaking engaged in generation or generation and distribution of power, therefore as per Section 32(1) of the Act, therefore, depreciation on them was required to be allowed at the prescribed rate of 15% and therefore, question fo entering them (windmills) in block of assets should not have arisen. Thus, depreciation under section 32 under these circumstances cannot be allowed on these two properties merely on the grounds that once these properties entered Block of Assets viz. Renewable Energy Devices, many years back and continues to be part of Block of Asset viz. Renewable Energy Devices, despite the fact that prescribed rate of depreciation on them had undergone substantial change from 80% to 15%, which cannot be given complete go bye. It may, therefore, be seen that necessary enquiry, examination and verification on the aforementioned issue were not conducted by the Assessing Officer during the assessment proceedings, which has rendered the assessment order passed by the A.O. u/s.143(3) of the Act, erroneous and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely for allowing depreciation at different rate of 15%. 6. The Ld.DR, on the other hand, submitted that the amendment made in the depreciation table given in Appendix-I to the Income Tax Rules, 1962 has an effect that the benefit of higher depreciation given on windmills installed on or before 31/03/2012 was withdrawn and the same was again restored only for the windmills installed on or after 1st April-2014. He contended that the assessee therefore was not entitled for depreciation @80% on the windmills installed on or before 31/03/2012 for AY 2013-14 and subsequent years and its claim for such higher depreciation for the year under consideration, i.e. AY 2015-16 was allowed by the Assessing Officer without considering the effect of the amendment made in depreciation table given in Appendix-I to the Income Tax Rules, 1962. He contended that the order passed by the Assessing Officer u/s.143(3) of the Act on this issue thus was erroneous as well as prejudicial to the interests of the revenue and Ld. Pr.CIT was fully justified in revising the same by exercising the powers conferred upon him u/s.263 of the Act. 7. We have considered the rival submissions and also perused the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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