AI Drafter 
TaxTMI 
TaxTMI 
2016 (5) TMI 789
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.....2008. 2.1 The issue in this appeal is the validity or otherwise in law of the assessee's claim for depreciation on what it calls an Effluent Treatment Plant (ETP), costing Rs. 29,13,344/-. While the Revenue considers it as an item of plant and machinery, allowing depreciation thereon at the normal rate of 15%, plus additional depreciation @ 20% (i.e., at a total of 35%), the assessee agitates for allowance of depreciation at 100%, pressing its claim under clause III(ix)[(e) & (q)] of Part A of Appendix I prescribed under rule 5 of the Income Tax Rules, 1962 ('the Rules' hereinafter), raising the following Grounds: '1. Re: Disallowance of depreciation in respect of Effluent Treatment Plant (E.T.P) of Rs. 18,93,674/-. 1.....
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....e submissions made by the assessee are examined. Even in the said additional evidences, the assessee has not furnished the evidences of the said EIP plant, the expenditure incurred, the components/apparatus/equipments forming part of the said ETP and the cost incurred on the assembly and putting to use of the same. The assessee has relied upon a certificate of a Chartered Engineer and some audit report without producing the actual invoices and evidences for the acquisition/construction of the said ETP, on which the assessee has claimed depreciation @ 100%. Hence, the claim is still unsubstantiated and, accordingly, disallowable.' The ld. CIT(A), on a consideration of the materials before him, held as under: 'From the above repor....
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....the environmental audit was conducted, admittedly for the first time, only in the year 2007 and not in the year 2006, being mandatory, with the installation of the ETP having been completed and, rather, stated as having been put to use (for the first time) by 30.9.2005, he could furnish no satisfactory answer, stating that the issue of the date of installation and of being put to use for the first time by 30.9.2005 is not in dispute; the Revenue having itself allowed depreciation at the normal rate of depreciation, in full. We will visit this aspect of the matter later. The question, however, is: Even granting that an ETP was set up and put to use during the relevant year, would it qualify to be a Water Pollution Control (WPC) Equipment,....
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....e systems as specified under the relevant clauses, has not been doubted by the Revenue. If that were the case, how we wonder could the Revenue disallow the assessee's claim in the first place? At the same time though, we are inclined to agree with the assessee's case. It has furnished all the materials it considered proper and relevant for the purpose. No further queries were raised, asking it to substantiate a particular aspect, by the Revenue. The assessee under the circumstances should not be put to the rigmarole of fresh proceedings before the A.O., who had another occasion during the remand proceedings to question and examine the assessee's claims. This is more so as there is nothing on record to suggest otherwise, with the assessee ha....
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....rewith, would submit that these bills are for labour, which are raised much after the actual conduct of the work and, accordingly, are not indicative of when the work was actually completed. We are unable to agree. The bills are, firstly, also for materials. Again, a delay in raising bills is understandable only for a few days, stretching up to a week to ten days, while in the instant case the bills continue to be raised even up to March, 2006. Then, again, as a matter of practice, it could be that the bills are raised for a month, at its' end. There is in fact a labour bill for 30.9.2005 itself (PB pg. 52), by Mamta Engg. Works, suggesting raising of bills on a regular basis. In fact, even if not so, the bills, where the work is scheduled ....