Tribunal denies depreciation on Wind Mill and interest expenses due to TDS non-deduction

The Tribunal upheld the disallowance of depreciation claimed on a Wind Mill and interest expenses due to non-deduction of TDS, dismissing the assessee's appeal. The ownership of the Wind Mill had not effectively transferred to the assessee, and necessary documentation for non-deduction of TDS was not provided. The decision was in line with previous case law and was pronounced in Ahmedabad on October 25, 2015.

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Issues Involved
1. Disallowance of depreciation claimed on Wind Mill.
2. Disallowance of interest expenses due to non-deduction of TDS.

Detailed Analysis

Disallowance of Depreciation on Wind Mill
The first issue pertains to the disallowance of depreciation claimed by the assessee on a Wind Mill amounting to Rs. 32,00,000. The Assessing Officer (AO) disallowed the depreciation on the grounds that the assessee had not paid the full sale consideration for the Wind Mill, and thus, the ownership had not effectively transferred to the assessee. The AO noted several discrepancies, including the fact that the Wind Mill was still registered under RPG Cables Ltd. and not the assessee, and there was no credible evidence of power generation by the Wind Mill in March 2008.

The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's decision, emphasizing that the Wind Mill's ownership had not been transferred to the assessee, as confirmed by the Karnataka Power Transmission Corporation. The CIT(A) cited a similar case, Besto Tradelink Pvt. Ltd. vs. ACIT, where the Tribunal held that without acquiring dominion over the Wind Mill, the assessee could not claim depreciation.

The Tribunal agreed with the findings of the AO and CIT(A), noting that the facts of the present case were identical to those in the Besto Tradelink Pvt. Ltd. case. The Tribunal upheld the disallowance of depreciation, concluding that the assessee did not acquire dominion or control over the Wind Mill, and thus, was not entitled to claim depreciation.

Disallowance of Interest Expenses Due to Non-Deduction of TDS
The second issue involves the disallowance of interest expenses amounting to Rs. 37,866 due to the non-deduction of Tax Deducted at Source (TDS). The AO observed that the assessee failed to furnish proof of filing Form 15H before the CIT(TDS), which is mandatory for non-deduction of TDS. Consequently, the AO disallowed the interest expenses.

The CIT(A) confirmed the AO's finding, reiterating that the assessee did not provide the requisite Form 15H. The Tribunal found that neither before the AO nor the CIT(A) had the assessee furnished proof of the requisite Form 15H. The Tribunal upheld the disallowance of interest expenses due to the failure to furnish the necessary documentation, thereby dismissing the assessee's appeal on this ground.

General Grounds
The third ground of appeal was general in nature and did not require independent adjudication.

Conclusion
The Tribunal dismissed the appeal of the assessee, upholding the disallowances made by the AO and confirmed by the CIT(A) regarding the depreciation on the Wind Mill and the interest expenses due to non-deduction of TDS. The order was pronounced in the Court on October 25, 2015, at Ahmedabad.

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