Depreciation for Windmills: Commissioning Date Key

The Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision to allow depreciation for windmills based on the commissioning date, despite electricity generation starting later. Relying on a High Court precedent, the Tribunal dismissed the Revenue's appeal, affirming that the commissioning date sufficed for claiming depreciation, irrespective of the actual generation date.

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Issues Involved:
The judgment involves the issue of depreciation allowance claimed by the assessee company for windmills installed in the previous year relevant to the assessment year under appeal, based on the date of commissioning of the generators and the actual generation of electricity.

Depreciation Allowance Issue:
The assessee company claimed depreciation allowance for the assessment year 1995-96 on the ground that the windmill generators were commissioned on 31.3.1995, despite electricity generation starting in June 1995. The Assessing Officer initially rejected the claim, stating that electricity generation began after June 10, 1995. However, the Commissioner of Income-tax(Appeals) accepted the claim based on the certificate of commissioning issued by the Tamil Nadu Electricity Board. The Tribunal set aside this decision and remitted the issue back to the Assessing Officer for reconsideration.

Upon reassessment, the Assessing Officer concluded that the windmills were put to use only on 10.6.1995 when electricity generation commenced, thus denying depreciation for the impugned assessment year. The Commissioner of Income-tax(Appeals) reversed this decision, allowing the depreciation claim. The Revenue appealed this decision before the Tribunal for the second time.

The Tribunal considered a similar case decided by the Hon'ble High Court of Madras, where 100% depreciation was allowed based on the commissioning date of windmills. Applying this precedent, the Tribunal upheld the Commissioner of Income-tax(Appeals)'s decision, stating that the commissioning date satisfied the condition for claiming depreciation, regardless of the actual electricity generation date.

In conclusion, the Tribunal dismissed the Revenue's appeal and the assessee's cross objection, affirming the allowance of depreciation based on the commissioning date of the windmill generators.

Separate Judgement by Judges:
No separate judgment was delivered by the judges in this case.

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