Tribunal grants higher depreciation for equipment, treats power line expenditure as revenue. Appellant's dismissed grounds can be raised later.

The Tribunal partly allowed the appeal, granting higher depreciation for specific equipment forming part of the cogeneration system and treating the expenditure on sub-station power lines and HT power line sanction as revenue expenditure. The appellant's grounds not pressed were dismissed with the option to raise them in the future.

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Issues Involved:
1. Disallowance of interest payable on purchase tax.
2. Disallowance of contribution to Mayura Kalaparishat.
3. Disallowance of depreciation on certain equipment forming part of cogeneration system.
4. Treatment of expenditure incurred on sub-station power line.
5. Treatment of expenditure for sanction of HT power line.

Issue-wise Detailed Analysis:

1. Disallowance of Interest Payable on Purchase Tax:
The appellant contended that the Commissioner of Income Tax (Appeals) erred in upholding the Assessing Officer's disallowance of interest payable on purchase tax amounting to Rs. 9,51,160. The appellant argued that the provisions of section 43B were not considered in the judgments relied upon by the authorities. However, this ground was not pressed by the appellant, acknowledging the prevailing legal position against them.

2. Disallowance of Contribution to Mayura Kalaparishat:
The appellant challenged the disallowance of Rs. 5,000 contributed to Mayura Kalaparishat as part of corporate social responsibility. This ground was also not pressed by the appellant due to the small amount involved, reserving the right to raise similar claims in the future.

3. Disallowance of Depreciation on Certain Equipment Forming Part of Cogeneration System:
The main issue revolved around whether specific equipment forms part of the cogeneration system eligible for higher depreciation. The appellant argued that items like RCC Chimney, Bagasse Drier, DC Drier, Steam Piping, Coal & Gas Feeding System, Coal Handling System, and Sub-station Tower Line should be considered integral parts of the cogeneration system.

- RCC Chimney and Bagasse Drier: The Tribunal held that these items are integral parts of the cogeneration system, as they form part of the high-efficiency boiler.
- DC Drier: Recognized as an energy-saving device eligible for higher depreciation even on a standalone basis.
- Steam Piping: Considered an integral part of the cogeneration system, as it cannot function independently.
- Coal & Gas Feeding System and Coal Handling System: Following the decision of the Hon'ble M.P. High Court in Vippy Solvex Products Ltd., these were deemed integral parts of the high-efficiency boiler and thus eligible for higher depreciation.
- Sub-station Tower Line: Not considered part of the cogeneration system as it is necessary for power distribution rather than generation.

4. Treatment of Expenditure Incurred on Sub-station Power Line:
The appellant claimed that the expenditure on sub-station power lines handed over to APTRANSCO should be treated as revenue expenditure. The Tribunal agreed, citing the Hon'ble Supreme Court's decision in NTPC Ltd., and the Hon'ble Rajasthan High Court's ruling in Hindustan Zinc Ltd., directing the AO to treat the expenditure as revenue expenditure.

5. Treatment of Expenditure for Sanction of HT Power Line:
The appellant argued that the payment made for sanction of HT power line should be treated as revenue expenditure. The Tribunal concurred, noting that the expenditure was necessary for obtaining approval from the power distribution company and did not result in the creation of an asset, thus directing the AO to allow it as revenue expenditure.

Conclusion:
The Tribunal partly allowed the appeal, granting higher depreciation for certain equipment forming part of the cogeneration system and treating the expenditure on sub-station power lines and HT power line sanction as revenue expenditure. Grounds not pressed by the appellant were dismissed with the provision to raise them in the future.

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