Tribunal Overturns Decision, Allows Depreciation on Windmill

The Tribunal allowed the appeal, overturning the CIT(A)'s decision to disallow depreciation on the windmill. The Tribunal found the evidence provided by the assessee, including certificates and test reports, convincing in establishing that the windmill was commissioned on 31.3.2005 and put to use, meeting the conditions for claiming depreciation. Despite the Revenue's contentions about suspicious documents and meter readings, the Tribunal considered the trial run of the windmill on the critical date as sufficient evidence of its use for depreciation purposes, ultimately ruling in favor of the assessee.

---

---

Issues:
- Disallowance of depreciation on windmill

Analysis:
The case involved an appeal filed by the assessee challenging the rejection of depreciation claim on a windmill by the CIT(A). The Assessing Officer disallowed the depreciation on the windmill, stating it was not commissioned in the relevant assessment year. The assessee contended that the windmill was commissioned on 31.3.2005, supported by various documents. The counsel argued that the Assessing Officer disregarded the evidence provided, including a certificate from the Executive Engineer and test reports. The CIT(A) upheld the disallowance based on the Assessing Officer's remand report, which questioned the generation of electricity and commercial production by the windmill on 31.3.2005.

The assessee presented documents such as certificates, test reports, and agreements to prove the windmill's commissioning on 31.3.2005. The counsel emphasized that the entire payment for the windmill's erection and commissioning was made by that date, indicating its commissioning. The Tribunal analyzed the conditions for claiming depreciation, focusing on the use of the asset during the relevant previous year. Referring to the evidence provided, the Tribunal concluded that the windmill was indeed commissioned on 31.3.2005 and put to use, satisfying the conditions for depreciation claim.

The Revenue contended that the documents signed on a single day raised suspicion, and the meter reading did not specifically show usage on 31.3.2005. However, the Tribunal found the evidence presented by the assessee to be convincing, including the trial run of the windmill on 31.3.2005. The Tribunal cited a previous case to support the view that trial production constitutes "use" for depreciation purposes. The Tribunal disagreed with the reliance on the Executive Engineer's statement during a survey, highlighting that such statements under section 133A hold no evidentiary value. Without conclusive evidence against the commissioning of the windmill, the Tribunal allowed the appeal, overturning the CIT(A)'s decision to disallow depreciation on the windmill.

---