Tribunal allows depreciation on wind power plant for A.Y. 2006-07; Revenue's appeal dismissed

The Tribunal upheld the CIT(A)'s decision to allow depreciation on the wind power generation plant for A.Y. 2006-07. The appellant's claim of depreciation amounting to Rs. 3.04 crores was contested by the revenue on grounds of commissioning timeline and supporting documentation. After reviewing evidence including Power Purchase Agreement, lorry receipts, and commissioning certificate, the Tribunal found in favor of the appellant, dismissing the revenue's appeal. The assessee was deemed eligible for the depreciation claim, and the initial disallowance by the AO was overturned.

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Issues:
1. Allowance of depreciation on wind power generation plant for A.Y. 2006-07.

Analysis:
The appeal before the Appellate Tribunal ITAT Delhi involved the issue of allowing depreciation of Rs. 3.04 crores claimed on a wind power generation plant for the assessment year 2006-07. The appellant, a company engaged in processing and export of rice, had also ventured into the business of wind power generation during the relevant year. The initial assessment framed under section 143(3) of the Act was set aside by the PCIT under section 263, directing the AO to verify the genuineness of the depreciation claim on the wind power plant. Subsequently, the AO disallowed the depreciation amount. The CIT(A) allowed the claim of depreciation after verifying the facts. The main contention of the revenue was that the wind mill plant was not commissioned during the relevant year, making the assessee ineligible for depreciation claim.

The AO disallowed the depreciation primarily on the grounds that the plant could not have been set up by the end of the relevant year, as evidenced by the sale bill date and lack of transportation evidence. Additionally, the Power Purchase Agreement was deemed antedated, and the auditor's report did not mention wind power generation business or depreciation claim. The Tribunal examined the Power Purchase Agreement and lorry receipts to ascertain the timeline of plant dispatch. Invoices from the seller and clarifications provided by Suzlon Energy Ltd. were also reviewed. The commissioning certificate issued by Karnataka Power Transmission Corporation Limited confirmed the plant's commissioning on 31.03.2006. Based on the conclusive evidence, the Tribunal upheld the CIT(A)'s decision to allow the depreciation claim, dismissing the revenue's appeal.

In conclusion, the Tribunal found no error in the CIT(A)'s decision to allow depreciation on the wind power generation plant for the assessment year 2006-07. The appeal filed by the revenue was consequently dismissed, affirming the eligibility of the assessee for the depreciation claim.

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