ITAT Chennai Upholds Additional Depreciation for Windmill Business

The Appellate Tribunal ITAT CHENNAI upheld the Commissioner's decision to grant additional depreciation to the assessee for the windmill business, based on the classification of business activities and the precedent set by the Hon'ble Madras High Court. The appeal by the Revenue against the order granting additional depreciation was dismissed.

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Issues Involved: Appeal by Revenue against order of Commissioner of Income-tax granting additional depreciation to assessee for assessment year 2007-08 u/s 143(3) of Income-tax Act, 1961 based on business activity classification.

Additional Depreciation Issue:
The Revenue contended that the assessee, engaged in hospital business, was not entitled to additional depreciation for windmill business. However, citing the judgment of the Hon'ble Madras High Court in Commissioner of Income-tax v. VTM Ltd. (319 ITR 336), it was held that an assessee, originally a textile unit, setting up a windmill was eligible for additional depreciation. The Tribunal found the High Court's decision applicable to the present case, affirming the Commissioner's grant of additional depreciation for the windmill business. Therefore, the appeal by the Revenue was dismissed.

In conclusion, the Appellate Tribunal ITAT CHENNAI upheld the Commissioner's decision to grant additional depreciation to the assessee for the windmill business, based on the classification of business activities and the precedent set by the Hon'ble Madras High Court.

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