Windmill depreciation treatment extends to specialised installation and civil works linked to the plant, while additional depreciation remains open.

Civil works, installation, labour, foundation work, land application fee and power evacuation expenditure connected with a windmill were treated as part of the windmill project because the windmill could not operate without the specialised installation and electrification infrastructure, which had no independent use apart from the windmill. On that basis, the related expenditure was regarded as forming a common plant and the claim to higher depreciation at 80% was accepted for admission purposes. The separate question of additional depreciation under Section 32(1)(iia) of the Income-tax Act, 1961 was not finally decided and was left open for consideration in the admitted appeal.

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Issues: Whether civil works, installation, labour, foundation work, land application fee and power evacuation expenditure incurred for a windmill formed part of the windmill project eligible for higher depreciation at 80%; and whether the claim for additional depreciation under Section 32(1)(iia) of the Income-tax Act, 1961 on the windmill required further consideration.

Analysis: The order records that the windmill could not function without installation, specialised civil construction and electrification, and that these components were so closely linked with the windmill that they constituted a common plant. It further notes that the machinery and its installation infrastructure were specialised and had no independent use apart from the windmill. On that basis, the higher depreciation claim on the connected expenditure was treated as justified. The question relating to additional depreciation was not finally answered and was kept for consideration along with the admitted appeal.

Outcome: The claim for higher depreciation on the connected windmill expenditure was accepted for the purpose of admission, and the appeal was admitted on the remaining question including additional depreciation.

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