2004 (7) TMI 307 - AT - Income Tax

Tribunal upholds depreciation claims for tankers and wind generators in assessment years 1996-97 and 1997-98

JOINT COMMISSIONER OF INCOME TAX. Versus GOYAL MG GASES LTD.

The Tribunal affirmed the CIT(A)'s decision to allow 100% depreciation on tankers and the depreciation claim on wind electricity generators for the ... Depreciation Issues Involved:1. Depreciation on tankers.2. Depreciation on wind electricity generators.Issue-wise Detailed Analysis:1. Depreciation on Tankers:The first issue pertains to whether the assessee is entitled to 100% depreciation on tankers used for the transportation of gases. The Tribunal referenced its previous decisions for assessment years 1992-93 to 1995-96, where it had been established that these tankers should be treated as cylinders for depreciation purposes. The CIT(A) had allowed 100% depreciation in those years, and the Tribunal had confirmed this decision. The Tribunal found no new evidence or argument from the Revenue to distinguish the current case from the previous years. Consequently, the Tribunal rejected the Revenue's ground of appeal, affirming that the assessee is entitled to 100% depreciation on the tankers.2. Depreciation on Wind Electricity Generators:The second issue concerns the claim of depreciation on wind electricity generators. The assessee had entered into an agreement on 1st February 1996 to purchase three wind farms, which were to be commissioned before 31st March 1996. The assessee claimed 50% depreciation on the wind farms, amounting to Rs. 11.17 crores, as the generators were used for less than 180 days. The AO disallowed this claim, arguing that the No Objection Certificates (NOCs) for installation were signed on 30th March 1996, implying that the generators could not have been put to use before 31st March 1996.On appeal, the CIT(A) found that the generators had indeed been commissioned during the relevant year and accepted the depreciation claim. The CIT(A) also dismissed the AO's contention that the assessee was not the owner of the wind farms.The Tribunal examined several pieces of evidence, including:- Statements from the supplier, M/s Wind Power Ltd., and the Delhi High Court's observations.- The Supreme Court's order, which confirmed that the project belonged to the assessee.- Certificates from the Tamil Nadu Electricity Board (TNEB) and other documents indicating that the generators were installed and operational before 31st March 1996.The Tribunal concluded that the assessee was the owner of the wind electricity generators and that the generators were installed and commissioned before the end of the financial year. The Tribunal found no merit in the Revenue's arguments and upheld the CIT(A)'s decision to allow the depreciation claim.Conclusion:The Tribunal dismissed the Revenue's appeals, affirming the CIT(A)'s orders that allowed 100% depreciation on the tankers and the depreciation claim on the wind electricity generators for the assessment years 1996-97 and 1997-98.