Windmill depreciation applies to integral installation components, including foundation, electrical items and power evacuation arrangements.

Higher depreciation applicable to windmills extends to civil work, foundation, electrical items, components and common power evacuation used in windmill installation. The Court treated these items as integral and indispensable to the windmill's installation and functioning, forming part of the common plant rather than separable assets. On that basis, the windmill rate of depreciation was held applicable to the impugned items, and the revenue's challenge failed.

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Issues: Whether depreciation at the higher rate applicable to windmills under Appendix I to the Income-tax Rules, 1962 extends to civil work, foundation, electrical items, components and common power evacuation used in installation of windmills.

Analysis: The civil work and foundation were necessary for installation and functioning of the windmill, and the electrical items, components and power evacuation arrangements were essential for transmitting the electricity generated. These items were so closely connected with the windmill that they formed part of the common plant and could not be treated as separable from the windmill for depreciation purposes. The Court agreed with the view that the legislative grant of higher depreciation to windmills and specially designed devices includes such integral and indispensable components.

Conclusion: Depreciation at the windmill rate was rightly allowed on the impugned items, and the revenue's challenge failed.

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