Assessee wins partial appeal for 100% depreciation on ETP; remanded for installation date verification.

The Tribunal partially allowed the assessee's appeal, confirming eligibility for 100% depreciation on the Effluent Treatment Plant (ETP). However, the case was remanded to the Assessing Officer for further examination regarding the installation and first-time use date of the ETP. The Tribunal stressed the importance of proper verification and adjustment of depreciation rates for future years based on the final determination of the ETP's installation date.

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Issues:
Validity of claim for depreciation on Effluent Treatment Plant (ETP).

Analysis:
The appeal concerns the validity of the assessee's claim for depreciation on an Effluent Treatment Plant (ETP) costing Rs. 29,13,344. The Revenue allowed depreciation at a normal rate of 15% plus additional depreciation at 20%, totaling 35%. However, the assessee contended for 100% depreciation under specific clauses of the Income Tax Rules. The CIT(A) upheld the disallowance of 100% depreciation due to lack of evidence regarding expenditure, equipment, and assembly cost. The assessee submitted a Chartered Engineer's certificate and an Environmental Audit Report, but the A.O. found the claim unsubstantiated. The CIT(A) affirmed the disallowance due to insufficient evidence. The Tribunal considered bills, audited accounts, and certificates provided by the assessee and concluded that the ETP qualified as Water Pollution Control (WPC) Equipment under relevant clauses, making it eligible for 100% depreciation.

The Tribunal questioned the date of installation and first-time use of the ETP. Despite being allowed full depreciation, bills indicated work continued post the claimed installation date. The Tribunal noted discrepancies in bill dates and lack of conclusive evidence on the ETP's actual first-time use date. Consequently, the Tribunal decided to restore this aspect to the A.O. for further examination. The Tribunal clarified its competence to address factual issues not considered by the Revenue, citing relevant legal precedents.

In conclusion, the Tribunal partly allowed the assessee's appeal, confirming eligibility for 100% depreciation on the ETP but directing further assessment on the installation and first-time use date. The Tribunal emphasized the need for proper verification and adjustment of depreciation rates for subsequent years based on the final findings on the ETP's installation date.

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