ITAT Delhi allows depreciation on wind turbines, emphasizes evidence for ownership.

The ITAT Delhi partially allowed the appeal, overturning the disallowance of depreciation on wind turbines. The Tribunal held that the assessee could claim depreciation as the turbines were used during the year, supported by ownership evidence. The decision stressed the significance of evidence in establishing ownership for depreciation purposes under the Income Tax Act. The challenge under section 14A was not pursued after the depreciation issue was resolved in favor of the assessee.

---

---

Issues:
Disallowance of depreciation on wind turbines and disallowance under section 14A of the Income Tax Act, 1961.

Issue 1: Disallowance of Depreciation on Wind Turbines

The assessee, engaged in power generation and capital market operations, filed a return declaring a loss for the year. The Assessing Officer disallowed depreciation claimed on two wind turbines purchased during the year, as full payment was made in a subsequent year. The AO concluded that the assessee was not the owner of the turbines on 31/03/2008 and disallowed depreciation. The CIT (Appeals) upheld this disallowance. The assessee contended that the turbines were purchased from a public limited company, supported by agreements, invoices, possession letters, and certificates of power generation. The assessee argued that depreciation is allowable once the asset is put to use, even for a day. The Tribunal found the assessee had ownership based on agreements, possession certificates, and power generation evidence. The Tribunal held that the lower authorities erred in disallowing depreciation, as the asset was used during the year, and the transaction was genuine. The Tribunal allowed the depreciation claim, setting aside the CIT (Appeals) order.

Issue 2: Disallowance under section 14A of the Income Tax Act

The authorized representative did not press the challenge against the disallowance under section 14A due to the small amount involved. Consequently, this ground was dismissed. The focus of the appeal shifted to challenging the disallowance of depreciation on wind turbines. The Tribunal's decision on the depreciation issue rendered the challenge under section 14A moot, as the primary issue was resolved in favor of the assessee. Therefore, the disallowance under section 14A was not discussed further in the judgment.

In conclusion, the ITAT Delhi allowed the appeal partially, overturning the disallowance of depreciation on wind turbines. The Tribunal held that the assessee was entitled to claim depreciation as the turbines were put to use during the year, and the transaction was genuine. The decision emphasized the legal principles governing depreciation claims and ownership rights under the Income Tax Act. The judgment highlighted the importance of evidence in supporting ownership claims and asset utilization for depreciation purposes.

---