2014 (12) TMI 752

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....of depreciation of Rs. 21,19,322/- on Windmill? (b) Whether, in the facts and circumstances of the case, the learned ITAT has erred in law in confirming the order of the CIT (A) deleting the disallowance of additional depreciation of Rs. 35,66,299/- u/s. 32(1)(iia) of the Income Tax Act, 1961, on windmill?" 2. (1) The first question pertains to the claim of the assessee for depreciation, at the rate of 80 per cent on installation of windmill for generation of electricity, such claim is arising out of Entry (xiii) of Appendix-I to the Income Tax Rules, 1962. Such entry pertains to renewable energy devises, which includes inter alia "Windmills and any specially designed devise which run on windmills". Insofar as the main equipment of wi....

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....indmill cannot be used until it is installed and for the installation of the same a specific civil structure is required. Necessary permission is required from the specific authority. Specific kind of electrification is required for the operation and maintenance of the windmill. The civil structure and the electrification created for the purpose of windmill are of no use, if the windmill is disposed of. Civil structure and the electric fittings would have to be dismantled. 4. This opinion of the appellate authority was confirmed by the Tribunal in the impugned judgment, in the following terms; "4. We have considered rival submissions and perused the orders of the AO and the CIT(A). The depreciation is allowable on renewable energy dev....

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....nt on renewable energy devises including windmill and any specially designed devise, which runs on windmill. The civil structure and the electric fitting, equipments are part and parcel of the windmill and cannot be separated from the same. The assessee's claim for higher depreciation on such investment was, therefore, rightly allowed. 6. The remaining portion of question No.1 requires consideration. 7. Question No.2 pertains to the assessee's claim of additional depreciation at the rate of 20 per cent under Section 32(1)(iia) of the Act, on the same windmill. Revenue opposed such claim on the ground that the assessee cannot be stated to be engaged in the business of manufacturing or  production of any article or thing. Such a q....