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of <h1>Court Allows Higher Depreciation for Power Infrastructure Linked to Windmill</h1> The court ruled in favor of the assessee, allowing higher depreciation at 80% for the power evacuation infrastructure, including electrical lines, as ... Rate of depreciation - 80% or 15% - Renewable energy device - nature of power evacuation infrastructure attached to a wind mill - Held that:- Assessing Officer after a laboured attempt to separate the renewable energy devices, in the case a wind mill for the power evacuation infrastructure referred to the nature of renewable energy, wind mills etc. and held that power evacuation infrastructure is not an integral part of a renewable energy devices and, therefore, proceeded to hold that depreciation shall be calculated at 15%. - CIT(A) set-aside this order and by holding that the power evacuation infrastructure is an integral part of the renewable energy devices and allowed depreciation @ 80%. - A wind mill, which is admittedly a source of renewable energy, cannot possibly function without power evacuation infrastructure and, therefore, to hold that it is not integral to a wind mill would be travestying of facts and justice. It would be necessary to clarify that we are not dealing with an ordinary device, where transmission lines and electricity generation devices are involved but a wind mill, which obviously cannot supply electricity without power evacuation infrastructure as integral to its very functioning and user. Consequently, we answer questions of law against the revenue - Decided against Revenue. Issues:1. Disallowance of higher depreciation on expenditure for installation of electrical line for power transmission and metering.2. Treatment of power evacuation infrastructure as part of windmill and renewable energy device.3. Eligibility of electrical lines for power transmission and metering for depreciation at 80%.Issue 1: Disallowance of Higher DepreciationThe dispute revolves around whether the power evacuation infrastructure, specifically electrical lines, should be considered as part of a windmill, a renewable energy device, and thus be eligible for higher depreciation at 80% instead of the standard 15%. The Assessing Officer initially disallowed the higher depreciation, arguing that the power evacuation infrastructure is not integral to the windmill. However, the CIT(A) overturned this decision, stating that the infrastructure is indeed essential for the windmill's operation. The ITAT upheld the CIT(A)'s decision, citing similar cases and emphasizing the interconnected nature of the infrastructure with the windmill. The court, after analyzing relevant judgments, concluded that the power evacuation infrastructure is integral to the windmill's functioning, making it eligible for higher depreciation.Issue 2: Treatment of Power Evacuation InfrastructureThe core question is whether the power evacuation infrastructure, such as electricity lines, should be classified as part of a windmill and a renewable energy device. The revenue contended that the infrastructure is not part of the windmill and should be depreciated at 15%. In contrast, the assessee argued that the infrastructure is dedicated to the windmill's operation and is essential for transmitting electricity, justifying the higher depreciation rate. The court, after reviewing precedents and considering the specialized nature of windmill operations, agreed with the assessee's stance. The court emphasized the interconnectedness of the civil structure, electrical fittings, and the windmill itself, affirming that the infrastructure is an integral component of the renewable energy device.Issue 3: Eligibility for Depreciation at 80%The debate focused on whether the electrical lines for power transmission and metering should be considered part of the renewable energy device, making them eligible for depreciation at 80%, or if they should be treated as separate plant and machinery eligible for a lower rate of depreciation at 15%. The revenue argued against the higher depreciation rate, highlighting the lack of evidence supporting the infrastructure's integration with the windmill. Conversely, the assessee maintained that the infrastructure's dedicated use for the windmill justifies the higher depreciation rate. The court, aligning with the assessee's position, emphasized the critical role of the power evacuation infrastructure in the windmill's operation, leading to the approval of depreciation at 80%.In conclusion, the judgment clarified that the power evacuation infrastructure, including electrical lines, is an integral part of a windmill, a renewable energy device, warranting higher depreciation at 80%. The court's decision was based on the interconnected nature of the infrastructure with the windmill and its essential role in electricity transmission. The judgment underscored the specialized and interconnected components of windmill operations, supporting the assessee's claim for higher depreciation rates.
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