Tribunal allows depreciation on windmill for business use, dismissing department's appeal.

The tribunal ruled in favor of the assessee, allowing the appeal and dismissing the department's appeal regarding the disallowance of depreciation on windmills. The decision was based on evidence showing that the windmill in question was indeed put to use for business purposes, as confirmed by documents from the AEN indicating electricity generation. Consequently, the tribunal found no substantial question of law and upheld the allowance of depreciation on the windmill, emphasizing the interpretation of "put to use" for claiming depreciation.

---

---

Issues:
1. Disallowance of depreciation on windmills
2. Interpretation of the term "put to use" for claiming depreciation

Analysis:
1. The appellant challenged the tribunal's decision allowing the assessee's appeal and dismissing the department's appeal regarding the disallowance of depreciation on windmills. The department raised substantial questions of law regarding the justification of deleting the depreciation disallowance on windmills at two different locations. The issue revolved around whether depreciation is allowable only when the windmill starts commercial power generation or when it is ready for power generation. The Assessing Officer contended that the assets were not put to use during the year, leading to the disallowance of depreciation.

2. The case involved windmills installed by the assessee without deducting TDS as required by the IT Act. The Assessing Officer treated the contract for windmills' supply, installation, operation, and maintenance as not merely a sale contract. The CIT(A) observed that one windmill did not generate electricity in April, indicating it was not ready for use in the previous year. In contrast, another windmill continuously generated electricity from the commissioning date, leading to the disallowance of depreciation on one windmill and sustaining it on the other.

3. The tribunal, considering the evidence provided by the assessee, found that the windmill in question was indeed put to use for business purposes. The documents from the AEN confirmed electricity generation from the windmill, contradicting the CIT(A)'s decision to disallow depreciation. Consequently, the tribunal allowed the assessee's appeal, concluding that no substantial question of law arose, and dismissed the appeal.

In conclusion, the judgment dealt with the disallowance of depreciation on windmills based on the interpretation of "put to use" for claiming depreciation. The tribunal's decision favored the assessee, emphasizing the evidence of electricity generation as proof of the windmill being put to use for business purposes.

---