TaxTMI 
TaxTMI 
2013 (1) TMI 733
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.... of the Income-tax Act. 2. The Commissioner of Income-tax ought to have also seen that the Assessing Officer enquired into the commencement of production of the windmill and all the documents in support of the fact had been looked into by the Assessing Officer. 3. The mere fact that the loan was sanctioned by the bank on 3rd of October, 2006 would not lead to a conclusion that the windmill commenced its operations only after that date and as such the order of the Commissioner of Income-tax is ill founded. 4. The Commissioner of Income-tax ought to have seen that the quantum of electricity generated depends on the wind power and merely because the quantum of power generated during October 15, 2006 and November 13, 2006 is more it could not be concluded that the windmill became operational only on or after October 15, 2006. 5. The Commiss....
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....aised by the supplier, M/s. Vestas RRB India Ltd, Inspection Reports issued by TNEB., approval by the Chief Electrical Inspector of Government of Tamilnadu, production report, etc., and after being convinced that the windmill started operations before September 30, 2006, the Assessing Officer allowed depreciation at 80 per cent. as claimed by the assessee. 4. The assessee stated that after erection of windmill by the supplier and commencement of generation of power, the bank has sanctioned the loan on October 3, 2006 having satisfied with the erection of windmill and generation of power, disbursed the loan amount directly to manufacturer of windmill, i.e., M/s. Vestas RRB India Ltd. All these facts have been examined by the Assessing Officer. Therefore, the assessee pleaded that the assessment made by the Assessing Officer under section 143(3) allowing depreciation at 80 per cent. is neither erroneous nor prejudicial to the interests of the Revenue. However, the Commissioner of Income-tax passed order under section 263 of the Act on March 22, 2012 setting aside the assessment order and directed to allow depreciation on windmill at 40 per cent. Against this order of the Commissio....
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....s of the view that the erection works were by and large completed by using the imported power only after October 15, 2006. Counsel for the assessee submits that this observation of the Commissioner of Income-tax is baseless and not supported by any material evidence to show that the assessee carried out major erection works during October 15, 2006 to November 13, 2006. Therefore, counsel for the assessee pleads for setting aside the order of the Commissioner of Income-tax. 8. The Departmental representative strongly supports the order of the Commissioner of Income-tax. The Departmental representative submits referring to pages 7, 8 and 9 of the paper book which contains copies of invoices by M/s. Vestas RRS India Ltd., for erection of windmill that these invoices are dated September 25, 2006 and September 30, 2006. Therefore, the windmill could not have generated power on September 29, 2006. In reply, counsel for the assessee submits that the supplier has issued these invoices only after erecting the windmill and the invoices have nothing to do with the generation of power. The supplier issuing invoices on 25th and 29th September 2006 does not come in the way of the claim of the....
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....sing Officer is erroneous and prejudicial to the interests of the Revenue as held by the hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC). The Department has not questioned the certificate issued by the TNEB that the windmill has commenced generation of power on September 29, 2006 as certified by them. 11. The hon'ble Madras High Court in the case of CIT v. Metal Powder Co. Ltd. [2012] 75 DTR 233 (Mad) considered a situation where the assessee claimed depreciation on windmill which were put to use on March 31, 1994 based on the certificate issued by State Electricity Board that the windmill has commenced generation of power during the year. The hon'ble Madras High Court held in para 8 of its order as under : "8. As far as the claim on depreciation on windmill is concerned, considering the fact that the Department itself had not questioned the State Electricity Board's certificate that the windmill was commis sioned during the year under consideration, being a factual finding, we have no hesitation in rejecting the Revenue'....