TaxTMI 
TaxTMI 
2011 (6) TMI 325
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....e case. He ought not to have done so. c) Without prejudice to above, the learned CIT(A) should have directed to reinstate the closing WDV as on 31/3/2005 and allow the depreciation on the same alongwith additional depreciation in A.Y 2006-07." 2. The assessee is a company. It is engaged in the business of refining and manufacturing of Platinum Group Metals. During the previous year the assessee claimed to have installed three Wind Electric Generators(WEG) of the value of Rs. 9,82,50,000/-. The assessee claimed that the Wind Mills were installed and put to use on 31/3/2005. The assessee had claimed depreciation at 3.93 crores @40% being 50% of the depreciation as the asset was put to use for last 180 days during the previous year. The assessee also claimed additional depreciation of WEGs of Rs. 73,68,750/- under section 32(2)(iia) of the Income Tax Act,1961 (the Act) at 50% of the additional depreciation admissible. Thus the claim for depreciation for WEGs was made by the assessee at a sum of Rs. 4,66,68,750/- (Rs. 3,93,00,000 + Rs. 73,68,750). 3. A survey under section 133A was conducted by the ADIT(Inv) Unit 5(2) Mumbai on 17/2/2006. In the course of survey....
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....assessee agreed to file a revised return withdrawing the claim of depreciation. The assessee however did not file revised return of income. 5. The assessee submitted before the Assessing Officer that the WEGs were installed on 24/3/2005 and were commission on 31/3/2005. The assessee pointed out to the Assessing Officer that on 16/2/2005 it had placed an order for supply of 3 Nos. of 750 KV NEGs for installation in Andiyar Region, Coimbatore District, Tamil Nadu with M/s. NEG MICON India Pvt. Ltd. The purchase order is at page 93 to 96 of the assessee's paper book. Clause (6) of the purchase order specifies that WEGs have to be commissioned by 31/3/05. The assessee also placed an order of erection and commissioning of the three WEGs and agreed to pay a sum of Rs. 33.06 lacs as erection and commissioning charges. A copy of the erection and commissioning order dated 16/2/2005 is at page 97 to 98 of the assessee's paper book. Clause (2) of this order clearly mentions that the WEGs have to be commissioned on or before 31/3/2005. The assessee entered into an agreement titled maintenance, service and availability agreement for three WEGs with NEG MICON India Pvt. Ltd. This agreeme....
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....e the end product and ends with the realization of the ultimate profit. A business of manufacturing does not begin or end with manufacturing the product, it begins with all the process which are undertaken by the assessee to facilitate the manufacturing. The purpose of manufacturing is to earn a profit out of the products manufactured. The profit can be earned by marketing or trading the product. It is one whole cycle of a business or trade which is comprehended in this section. If the plant relates to the process of the business or manufacturing then it is used for the purpose of business. The Assessee submitted that it can be said that the assessee has used the WEG plant for the purpose of business and is eligible for depreciation since it is acquired and commissioned the WEG's before 31/3/2005. 9. The Assessing Officer however placed reliance on the statement recorded at the time of survey and held that the assessee did not put to use the three WEGs during the previous year and, therefore, not entitled to claim of depreciation. 10. On appeal by the assessee the CIT(A) confirmed the order of the Assessing Officer. According to him the fact that the Wind Mills were....
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....s evidence to show that there was installation and commissioning of Wind Mills on 30/3/2002. Thereafter the Tribunal also held as follows: "14. In ACIT vs. Ashima Syntex Ltd. (2201) 251 ITR 133 (Guj), it has been held at page 133 head note: "......... Even trial production of a machinery would fall within the ambit of "used for the purpose of business". Further, as the statute does not prescribe the minimum time limit for "use" of the machinery, the assessee cannot be denied the benefit of depreciation on the ground that the machinery was used for a very short duration for trial run." 15. In CIT vs. Union Carbide (I) Ltd. [2002] 254 ITR 488 (Cal) it has been held at page 489 [head note] "...... Thus , the trial production was quite sufficient to claim both depreciation and investment allowance." 16. In Omkar Textile Mills (P) Ltd. vs. ITO [2008] 115 TTJ (Ah. Tribunal] 716 . it has been held that in view of certificate of Gujarat Energy Development Agency [GEDA], sales tax exemption certificate, eligibility certificate, commissioning certificate and quick test report issued by DEDA and letter of NEPC-MICON evidencing that Wind Turbine Generating set ....