Tribunal Decisions: Depreciation Rates on Equipment, Tankers Remanded, Windmill Components

In ITA No. 315/JU/2009 for Assessment Year 2006-07, the Tribunal upheld the Assessing Officer's decision to disallow higher depreciation rates on dumpers, considering them as construction equipment rather than transport vehicles. In ITA No. 438/JU/2012, the Tribunal remanded the issue of tankers back to the AO for fresh consideration due to jurisdictional concerns and upheld the CIT(A)'s decision allowing higher depreciation on windmill components.

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Issues Involved:
1. Deletion of disallowance of depreciation on dumpers.
2. Deletion of disallowance of depreciation on tankers.
3. Deletion of disallowance of depreciation on windmill.

Summary:

Issue 1: Deletion of disallowance of depreciation on dumpers
The first issue raised in ITA No. 315/JU/2009 for Assessment Year 2006-07 pertains to the deletion of disallowance of depreciation on dumpers. The assessee claimed depreciation at 30% on dumpers, arguing they were transport vehicles registered under the Motor Vehicle Act. The Assessing Officer (AO) allowed only 15% depreciation, considering dumpers as construction equipment. The CIT(A) allowed 30% depreciation, following an earlier order. The Tribunal, referencing its previous decision in the assessee's case for Assessment Years 2004-05 and 2005-06, upheld the AO's view, stating dumpers are not transport vehicles and restored the AO's decision.

Issue 2: Deletion of disallowance of depreciation on tankers
The second issue involves the disallowance of depreciation on tankers. The AO disallowed depreciation, citing an inflated cost due to unaccounted discounts. The CIT(A) deleted the disallowance, referencing earlier appellate orders. The Tribunal, following its prior decision for Assessment Year 2005-06, found the CIT(A) exceeded jurisdiction and restored the AO's decision. For ITA No. 438/JU/2012, the Tribunal remanded the issue back to the AO for fresh consideration, aligning with observations from the earlier order.

Issue 3: Deletion of disallowance of depreciation on windmill
The third issue in ITA No. 438/JU/2012 concerns the deletion of disallowance of depreciation on windmill components. The AO allowed lower depreciation rates on civil work, electric items, and common power evacuation charges, disallowing Rs. 34,82,233/-. The CIT(A) allowed 80% depreciation, considering these components integral to the windmill. The Tribunal upheld the CIT(A)'s decision, referencing its earlier order in a similar case, stating the expenses were necessary for the windmill's installation and operation, thus qualifying for higher depreciation.

Conclusion:
The appeal in ITA No. 315/JU/2009 is allowed, restoring the AO's decisions on dumpers and tankers. The appeal in ITA No. 438/JU/2012 is partly allowed, with the issue of tankers remanded for fresh consideration and the CIT(A)'s decision on windmill depreciation upheld.

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