Depreciation of Windmills in Block Assessment: High Court Dismisses Appeal

The High Court of Madras addressed the issue of depreciation of windmills purchased in the same year prior to the date of search in the context of block assessment years from 1986-1987 to 1996-1997. The Court focused on whether the depreciation should be granted in regular assessment or block assessment. The Court dismissed the Tax Case Appeal, as the issue of depreciation under regular assessment year was not considered a question of law, based on the acceptance of the commissioning date by the Tribunal and the Court, following a precedent set in a prior case.

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Issues:
1. Whether depreciation of windmills purchased in the same year prior to the date of search should be granted in regular assessment or block assessment.

Analysis:
The High Court of Madras addressed the issue of depreciation of windmills purchased in the same year prior to the date of search in the context of block assessment years from 1986-1987 to 1996-1997. The Court admitted only the second question of law for consideration, focusing on whether the depreciation should be granted in regular assessment or block assessment. The assessee contended that the income disclosed in regular books of accounts should be considered for regular assessment, leading to the grant of 100% depreciation.

The Court noted that the first question regarding the date of commissioning of the windmill was not admitted, and as the issue had attained finality, it became academic for consideration. The Assessing Officer had initially assessed the income for the block period at 60% plus 15% surcharge, restricting the depreciation claimed by the assessee to 50% due to lack of evidence of commissioning before 30.9.1995. However, based on a letter from the Assistant Executive Engineer, the Tribunal accepted the commissioning date as 30.9.1995, similar to a previous case where relief was granted to the assessee.

The Court acknowledged the precedent set by a prior case where a similar issue was decided in favor of the assessee. Considering the findings of the Tribunal and the acceptance of the commissioning date by the Court, the issue of depreciation under regular assessment year was deemed not to be a question of law. Therefore, the Tax Case Appeal was dismissed with no costs incurred.

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