TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 705
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.... from the block of "Windmill" as it has been shown over and over the cost of windmill in his books of account and hence the assessee cannot claim accelerated depreciation, which is allowable only to the block of "Windmill". 4. The Ld. CIT(A) erred in failing to appreciate that as per the Appendix I of Rule 5(1A) of the IT Rule, depreciation @ 80% was to be applicable only in respect of windmill and that there was no mention of depreciation to be applicable at the same rate with respect to the civil work for erection of windmill. 5. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings. 3. The assessee in CO No.11/PN/2016 has raised the following grounds of cross-objections:- 1. "On facts and circumstances prevailing in the case and as per provisions & Scheme of the Act it be held that, disallowance/addition made by AO and that upheld by the first appellate authority on account of capital expenditure of Rs. 3,00,000/- is improper, unjustified and contrary to the facts and provisions of law. The addition / disallowance of Rs. 3,00,000/- be deleted. The respondent be granted just and proper relief....
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.... the co-ordinate Bench of the Tribunal in the case of Aminity Developers and Builders (Supra) and the decision of Hon'ble Punjab & Haryana High Court in the case of Eastman Impex (Supra). We find that in the case of Aminity Developers and Builders (Supra), the Coordinate Bench has considered the decision rendered in the case of Poonawalla Finvest and Agro Pvt. Ltd., (Supra) and has distinguished the same. The Tribunal after detailed discussion on the issue finally concluded that Civil work comprising of foundation of the windmill is an integral part of windmill erection. Therefore, the same is eligible for depreciation at the same rate as is applicable in the case of windmill. Similarly, the cost of commissioning and erecting windmill cannot be said to be separate from the windmill as it is directly related to the functioning of the windmill. Therefore, the same rate of depreciation will apply on the cost of commissioning of the windmill. The relevant extract of the order of the Tribunal in the case of DCIT Vs. Aminity Developers and Builders (Supra) is as under:- "4. In the present case, the functional test of the foundation has been explained by the Ld CIT(A). The Ld CIT(A) has ....
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....Court (supra) and had also noted that the assessee had incurred cost for electrical work including supply and installation of electrical items, labour charges for testing and commissioning out and contribution towards power evacuation infrastructure cost, which were incurred exclusively for running and maintenance of windmill installed and proper functioning of windmill. The Assessing Officer on the other hand, had allowed depreciation on the cost of windmill of Rs. 5,52,04,508/- and had not allowed higher depreciation on ancillary cost of Rs. 81,86,126/- incurred for erection of windmill. Accordingly, following the same parity of reasoning of coordinate Bench of Tribunal and the Hon'ble Bombay High Court (supra), we find no infirmity in the order of CIT(A) in allowing the claim of higher depreciation to the assessee and in view thereof, we dismiss the grounds of appeal raised by the Revenue. 11. Now, coming to the Cross Objection filed by the assessee. 12. The first issue raised is against disallowance of Rs. 3 lakhs holding the same to be capital expenditure. The Assessing Officer noted that auditor of assessee in the audit report in column 17(a) under the head 'Expenditure of ....
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....ratio laid down by the Ahmedabad Bench of Tribunal in Inductotherm (India) Ltd. Vs. DCIT (supra). 17. We find that the Tribunal in Inductotherm (India) Ltd. Vs. DCIT (supra) had held that unless and until scrap value of the machinery which has been discarded, demolished or destroyed during the previous year is ascertained the same cannot be reduced for the purpose of computing depreciation. In the instant case, the machinery in question was only scraped during the year, that meant it had not been used during the previous year. The scrap value of the same had not been ascertained as yet which would be possible only after selling the same. Therefore, nothing could be reduced at present from the written down value of the block assets and the Tribunal thus, directed the Assessing Officer to allow depreciation as claimed by the assessee on the aforesaid assets. The issue arising before us is similar to the issue before the Ahmedabad Bench of Tribunal in Inductotherm (India) Ltd. Vs. DCIT (supra) and following the same parity of reasoning, we hold that the assessee is entitled to the claim of depreciation on the assets. The ground of Cross Objection No.1 raised by the assessee is thus, ....
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....enue on the completion of projects, all cost relatable to such projects which are completed, are to be allowed along with interest attributable to the project in the year when the project is completed and the income from project is offered for taxation. The Assessing Officer was directed to determine and allow proportionate interest attributable to the project which was completed and income of which has been offered to taxes and remaining income was directed to be capitalized and apportioned to different projects on the basis of utilization of borrowed funds. The assessee before us claims that the working of interest attributable to the projects placed at pages 1 to 3 of the Paper Book, were filed before the Assessing Officer and also placed at pages 4 to 6 of the Paper Book. In the entirety of the above said facts and circumstances, where the assessee is following project completion method, the assessee is entitled to claim the deduction on account of interest attributable to such projects against the revenue recognized of the said project. However, where the assessee has not recognized the revenue of the projects which have not been completed, then the interest attributable to su....