Appeal outcome: depreciation allowance for windmill infrastructure upheld, contribution depreciation allowed despite ownership challenge.

The appeal was partially successful as the disallowance under Section 36(1)(iii) was upheld, but the disallowance of higher depreciation on the installation of the electrical line was deleted. The court affirmed the treatment of power evacuation infrastructure as part of the windmill for depreciation purposes, rejecting the appellant's argument. Additionally, the court upheld the allowance of depreciation on the contribution for the power evacuation facility, despite the appellant's challenge based on ownership.

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Issues:
1. Disallowance under Section 36(1)(iii) deleted by ITAT
2. Disallowance of higher depreciation on installation of electrical line
3. Treatment of power evacuation infrastructure as part of windmill for depreciation
4. Allowing depreciation on contribution for power evacuation facility

Analysis:

1. The appellant contested the disallowance made under Section 36(1)(iii), arguing that the ITAT erred in upholding the order of the CIT(A) which deleted the disallowance. The appellant relied on a judgment of the Punjab & Haryana High Court. However, the court noted that the issues related to higher depreciation and power evacuation infrastructure were already covered by a previous judgment against the appellant. Therefore, the appeal on these issues was dismissed.

2. Regarding the disallowance of higher depreciation on the installation of the electrical line, the court found that the CIT(A) had deleted the disallowance, which was upheld by the ITAT. The appellant's argument was rejected as the court found that the power evacuation infrastructure was considered part of the windmill by the ITAT. The court upheld the decision of the lower authorities in this regard.

3. The court addressed the issue of treating the power evacuation infrastructure as part of the windmill for depreciation purposes. The appellant claimed that the infrastructure was not a renewable energy device and thus not eligible for depreciation at 80%. However, the court found that the ITAT had considered the infrastructure as part of the windmill and renewable energy device. The court noted that the AO's evidence was insufficient to prove otherwise. Therefore, the ITAT's decision was upheld in this matter.

4. Lastly, the appellant challenged the allowance of depreciation on the contribution for the power evacuation facility, arguing that they did not own the asset. The court observed that the appellant was a contributor for availing the facility, not the owner. Despite this, the ITAT allowed depreciation on the contribution. The court found no legal error in this decision and dismissed the appeal accordingly.

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