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2012 (12) TMI 1046
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....grounds: "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in : 1. deleting the disallowance of excess depreciation of Rs. 13,66,440/- claimed on wind-mill 2. deleting the disallowance of depreciation claimed @ 80% on evacuation charges of Rs. 20,20,000/-." 3. Facts of the case, in brief, are that the assesseecompany is engaged in the manufacturing of Glaze Frit mainly used for ceramic tile manufacturing units. It is also engaged in generation of wind-power-energy. The assessee-company filed its return of income for Assessment year 2008-09 on 29.9.2008, disclosing total income of Rs. 1,31,999,340/-. Subsequently, the assessee revised its return on 16.3.2010 in which income was disclosed at Rs. 2,18,04,980/-. In the revised return, the assessee itself withdrew the claim of deduction made u/s 80IA of the Income-tax Act, 1961 [hereinafter referred to as 'the Act', for short]. The assessee had got installed a windmi ll through Suzlon Infrastructure Limited on which depreciation @ 80% has been claimed. The value of assets and rate of depreciation applied by the assessee to claim depreciation is as under : Item Cost ....
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....Cost (Rs.) Eligible rate of Depreciation Depreciation allowable @ 50% (Rs.) Excess claim by the assessee (Rs.) Foundation work and transformer 26,61,554/- 10% 1,33,077/- 9,31,544 Cost of wind-mill, tower and installation charges 2,73,20,696 + 11,88,769 80% 1,14,30,752 - Transformer and electrical components 17,51,904 80% 7,00,761 - Electrical items and installation 13,38,141 15% 1,00,360 4,34,896 13,66,440 So, the A.O. has disallowed total excess claim of depreciation of Rs. 13,66,440/- [Rs. 9,31,544/- on foundation work and transformer plinth, and Rs. 4,34,896/- on electrical items and installation]. This amount has been deleted by the ld. CIT(A) ad is the subject-matter of Ground No. 1 of Revenue's appeal. Deletion of addition of Rs. 20,20,000/- relates to disallowance of excess claim of depreciation on evacuation charges. This issue is the subject matter of Ground No. 2. 5. We will discuss al the issues head-wise. Expenditure on foundation and electrical Regarding installation of wind-mill The wind turbine generation machine of 600 kw alongwith rotor blades....
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....ion charges. Electricity generated by the windmill is transmitted to the State Electricity Board's Grid through power evacuation facility. Power evacuation is essential to transmit electricity generated by windmill to state electricity grid without which it is impossible to sell the power generated by the wind-mill. This system is developed by authorized agencies by the State Government. For augmentation of transmission/ distribution system to evacuate the power from receiving station, discom develop/augments the necessary transmission/distribution network and for that, the assessee pays its one-time charges, which are nonrefundable. Thus, evacuation charges paid are an integral part of the cost of acquiring the wind-mill. Similar view has been taken by the Jodhpur Bench in the case of K.K. Enterprises [supra]. Therefore, by respectfully following the Tribunal order, we cannot allow the grounds raised by the Revenue and confirm the finding of the ld. CIT(A). Accordingly, both the grounds raised in this appeal stand dismissed. 8. In the result, the appeal of the Revenue stands dismissed. ITA No. 290/JU/2012 [Assessment year 2005-06] 9. This is an appeal of the Revenue filed....
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.... The A.O. has pointed out that the commission of Rs. 1,92,584/- was deducted on 8.2.2005 which should have been deposited by 7.3.2005 while the same was deposited on 6.4.2005. The assessee's case is that the bill after verification was passed for payment on 1.3.2005 and TDS was made on 1.3.2005, which was deposited on 7.4.2005, and the same is within the prescribed limit. The ld. CIT(A) has relied on the decision of the Hon'ble Calcutta High Court in the case of CIT Vs. Virgin Creations order dated 20.11.2011, holding that the Finance Act, 2010 has amended the provisions of section 40(a)(ia) which are applicable w.e.f. 1.4.2005 and as per this amended provision, the expenditure is allowable if the tax has been deducted at source before the end of the previous year and paid before the due date of filing of the return of income. In this case, admittedly and undeniably the return of income was filed before the due date. Therefore, we are also in agreement with the above finding of the ld. CIT(A) which could not be successfully controverted by the department. Furthermore, we have noticed that the assessee company paid quarterly commission to M/s Cera Ceramics and the required TDS f....
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....st which the ld. counsel for the assessee, Shri Pokharana, has taken the reasoning which were taken before the A.O. and the ld. CIT(A) and has agreed with reference to the point made in the orders by the authorities. 16. After co-agitating rival stands in the light of available evidence on record, agree with the finding of ld. CIT(A), in this regard. It is noticed from records that the assessee has made payment of Rs. 42,70,753/- to Indus Intermodel Carriers [Bombay] Pvt. Ltd. for payment of duties, freight and other part expenses. The payee company has issued detailed bill supported by proof of expenses incurred on assessee's behalf. The company has separately charged for this work. It was found as a fact that the likes of payee company [agency] are authorized or l icensed to work at parts and assessee has to carry its work through one of them, without there being any written agreement, etc. The work of mediator-agency like payment to shipping line for freight, freight charges, administrative and other charges payable to respective authorities by the assessee, are done through them. For this work, the company [payee] charges, separately apart from the actual payments made on be....
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....3. After considering the submissions and perusing the material on record, we find that the ld. CIT(A) was justified in allowing the claim of the assessee on account of that these payments were made on account of reimbursement of expenditure which do not constitute any income in the hands of payee. Similar view has been expressed by the Hon'ble Delhi High Court in the case of Grandprix Fab Ltd. 34 DTR 248. Therefore, we are of the view ld. CIT(A) was justified in holding that on account reimbursement of expenses, no liability was there u/s 194C." 18. Regarding remaining payment of Rs. 3,79,150/- i.e. payment made to CFA, the agent of non-resident shipping carriers in pursuance of Sec. 175 do not attract application of Sec. 194C, which is applicable to only residents. In this regard, the decision of Jodhpur Bench rendered in the case of Amarjyothi Granites [India] Pvt. Ltd Vs. ACIT in ITA No. 201/JU/2010 and that of Minpro Industries reported in 143 TTJ 331, are relevant. 19. Hence we do not find any fallacy in the finding given b the ld. CIT(A). He has come to his conclusion by relying on the decision of jurisdictional Jodhpur Bench of ITAT and the S.B. of the ITAT, inter ....
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....part of furnace is wrong as this is not DG set, this is gas based generator and the same was part of furnace and without this furnace cannot work. The gas based generator is integrated part of furnace and cannot be separated. It is submitted process of manufacturing is such that it cannot afford to break at any moment otherwise whole batch of the product is liable to be waste. Further, furnace comprises of too many items and gas based generator is also one of them. Further, assessee company has capitalized on the basis of complete technical reports. The A.O. has not understood complete technicalities and only by common words he made his opinion and arbitrarily disallowed depreciation on part of plant. Therefore, considering above depreciation is allowable on complete furnace including the gas based generator and allied attached to that. The appellant has further stated that in the process of manufacturing of frit, the required raw material is mixed in certain proportions and is being melted product is then quenched into water to cool down and then dried upto form crystals, finished product. Alongwith this, the appellant has given copy of ledger account fo....