2010 (4) TMI 1141 - HC - Income Tax

High Court upholds Tribunal decision on windmill ownership & depreciation claim

Commissioner of Income Tax Versus Kences Constructions (P) Ltd.

The High Court affirmed the Tribunal's decision, ruling in favor of the assessee's ownership of windmills and entitlement to claim depreciation under ... - Issues involved: The issue in this case revolves around whether the assessee is the rightful owner of windmills and entitled to claim depreciation under section 32 of the Income Tax Act.Judgment Summary:1. Ownership of Windmills and Claim for Depreciation:The case pertains to the assessment years 1997-98 and 1998-99, where the assessee claimed ownership of windmills purchased from its sister company, with all considerations duly recorded and bank loans discharged. The Assessing Officer (AO) disallowed depreciation, citing the windmills still being hypothecated with the bank in the sister company's name. However, the appellate authority found evidence supporting the transfer of possession to the assessee, with a board resolution for purchase and income declaration. The Tribunal upheld the assessee's ownership, considering possession, income declaration, board approval, and loan repayment by the assessee, dismissing the Revenue's appeal.2. Consideration of Grounds and Conclusion by Tribunal:The appellant raised concerns regarding non-consideration of grounds and doubted the transfer with the sister company, which also claimed depreciation. However, the Tribunal's conclusions, based on possession, loan repayment, and income assessment in the assessee's hands, were deemed correct. The High Court found no error in fact appreciation or material consideration, dismissing the tax case appeal and closing related petitions without costs.In conclusion, the High Court affirmed the Tribunal's decision, emphasizing the factual evidence supporting the assessee's ownership of windmills and entitlement to claim depreciation under the Income Tax Act.