2012 (10) TMI 351

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....ection 143(2) of the Income Tax Act, 1961 was issued to the assessee. The Assessing Officer vide assessment order dated 30.12.2008 made certain additions/disallowances in the income of the assessee. Aggrieved against the assessment order, the assessee filed an appeal before the CIT(A), Tiruchirapalli. The CIT(A) partly allowed the appeal of the assessee vide order dated 25.01.2010. While partly allowing the appeal, the CIT(A) upheld the findings of the Assessing Officer with respect to the depreciation on windmills as well as disallowance of expenses relating to dyeing, tailoring wages, stitching charges, weaving and packaging charges etc. The CIT(A) further confirmed the order of the Assessing Officer with regard to disallowance of mending....

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....vered by the order of the co-ordinate Bench of the Tribunal in ITA No.2291/Mds/2008. Therefore, the appeal of the assessee can be disposed of accordingly. However, with regard to ground no.9 & 10 relating to the disallowance under section 40(a)(ia), the DR submitted that the Assessing Officer has passed speaking order thereon and the same may be sustained. 5. We have heard the submissions made by the parties and have gone through the orders of the authorities below as well as the order dated 20th November, 2009 passed by the co-ordinate Bench of the Tribunal in the case of the assessee in ITA No.2291/Mds/2008 relevant to the assessment year 2005-06. Grounds no.2 to 6 and 11 to 13 in the present appeal relates to depreciation. In para no.1....

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....called a 'wind mill' since a wind mill to work these are essential. All these are necessary inputs going into ultimate cost of such wind mill. The foundation structure or the specially demarcated appurtenant thereto cannot be considered as equivalent to a hotel or a cinema building which is adjunct to carrying on a hotel business or theatre business. On the other hand these can be deemed only a part of a windmill for harnessing wind energy. In coming to this conclusion we are fortified by decision of Hon'ble Karnataka High Court in the case of CIT v. Karnataka Power Corporation (247 ITR 268) where it was held that whether a the building can be treated as a plant was a question of fact and when it is found as a fact that the building has be....

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....ire amount claimed as depreciation on windmill. The order of the CIT(A) on the issue is set aside. 6. The issue relating to claim of the assessee claiming tailoring charges, stitching charges etc., the same has also been adjudicated by the co-ordinate Bench of the Tribunal in the aforementioned appeal, wherein the Tribunal relying on its earlier order in another case i.e. ITA No.1818 to 1821/Mds/2008 dated 21.4.2009 held that "1% disallowance would be fair in the interest of justice, hence we direct the Assessing Officer to restrict the disallowance to 1%." The relevant extract of the aforesaid order is reproduced herein below:- "5. In para 10 of its order dated 21.04.2009, in ITA Nos. 1818 to 1821/Mds/2008, it was held as under: We have....