Court Upholds Depreciation Claim on Windmills; Employee Welfare Fund Contribution Deductible

The High Court dismissed the Income Tax Appeal, upholding the decisions of the Commissioner and Tribunal regarding the claim of depreciation on windmills by the assessee. The Court found that the assessee had purchased the windmills, making them eligible for depreciation, and no question of law arose in this regard. The issue of tax evasion motive was not considered for this judgment, and the Court also confirmed the entitlement of the assessee to claim depreciation on the windmills despite not being the registered owner initially. The Court further noted that the employee's contribution to welfare funds was allowable for deduction as it was made before filing the return.

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Issues:
1. Disregarding the motive of tax evasion for claiming tax benefits
2. Claiming deduction under Section 80JJA for bagasse/husk as a by-product
3. Claiming depreciation on windmills without ownership
4. Disallowance of employee's contribution to welfare funds

Issue 1:
The High Court noted that the issue of tax evasion motive was addressed in a previous case, and thus not considered for this judgment.

Issue 2:
Regarding the deduction under Section 80JJA for bagasse/husk as a by-product, the Court found that the assessee had purchased windmills and made payments through bank channels. The Sales Tax Entitlement Certificate was modified accordingly, and a Memorandum of Understanding was produced. The Commissioner and Tribunal concluded that the assessee had indeed purchased the windmill, making them eligible for depreciation. Therefore, the Court dismissed the appeal as no question of law arose.

Issue 3:
The Court addressed the claim of depreciation on windmills without ownership. The Assessing Officer argued that the assessee, not being the registered owner of the windmills, could not claim depreciation. However, the Commissioner and Tribunal found evidence of the purchase of windmills by the assessee, supported by payment records and documentation. As a result, the Court upheld the decision that the assessee was entitled to claim depreciation on the windmills.

Issue 4:
Regarding the disallowance of employee's contribution to welfare funds, the Court referenced a previous judgment stating that the benefit of deduction for employees' contribution to provident fund would be available as long as it was made before filing the return. Since the contribution was made before filing the return, the Court did not consider this issue further.

In conclusion, the High Court dismissed the Income Tax Appeal, upholding the decisions of the Commissioner and Tribunal regarding the claim of depreciation on windmills by the assessee.

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