TaxTMI 
TaxTMI 
2016 (9) TMI 598
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....-, on the cost of Wind Mill of Rs. 9,45,00,000/-, because the wind mill was not acquired during the relevant previous year. Reasons for arriving at the abovesaid conclusion were that, (a) The invoice for sale of the windmill was dated 31.03.2008 i.e. the last date of the relevant previous year. (b) The assessee had paid only Rs. 1,86,00,000/- out of the total cost of the windmill Rs. 9,45,00,000/- as on 31.03.2008. (c) The balance amount of Rs. 7,79,00,000/- was paid during the month of May & June 2008 as follows:- Sl.No. Date of Payment Amount (Rs.) 1 06.05.2008 59,00,000/- 2 30.06.2008 7,00,00,000/- Total 7,59,00,000/- (d) The agreement with TNEB for sale of power was dated 29.03.2008 and the approval of the same was communicated by the S.E Tirunelveli/TNEB on 22.04.2008. (e) The office of S.E. TNEB has not responded to the query raised by the Ld. Assessing Officer to clarify as to how sale agreement of power could be entered with the assessee by the TNEB on 29.03.2008 when the assessee has purchased the windmill vide invoice dated 31.03.2008. (f) No specific evidence was produced either by the seller or by the buyer of the windmill that the prop....
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....une' 2008, after the end of the financial year and therefore, the asset was not transferred to the assessee. 6. Learned counsel for the appellant further submitted that the Tribunal ought to have appreciated the fact that the purchase invoice was dated 31.03.2008 and approval of the Superintending Engineer, Tamil Nadu Electricity Board, was communicated only on 22.04.2008. It is also his submission that the documents relied on by the respondent-assessee to conclude that they are entitled for depreciation, were not placed before the assessing officer. 7. Learned counsel for the appellant further submitted that the Tribunal ought to have appreciated that the wind mill generator was not ready to use and operational, as on the last day of the financial year and therefore, the assessee is not entitled for depreciation, on the asset. On the above submissions, he took this Court through the orders of the authorities and that of the Tribunal and thus, prayed for an answer in favour of the revenue, on the first substantial question of law. 8. As regards the second substantial question of law, learned counsel for the appellant further submitted that the Tribunal in holding that no opp....
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....idering the evidence adduced at the appellate stage and the arguments, the Commissioner of Income-Tax (Appeals), in I.T.A.No.188/2010-11/CIT(A)/TRY, dated 29.01.2014, has ordered hereunder: "I have carefully considered the facts of the case; the arguments relied upon by the Assessing Officer for the disallowance and also the arguments advanced by the appellant. The appellant has established the fact that the order for the acquisition of the Wind Mill started as early as on 02.02.2008. The appellant has also established the passing of consideration by its own resources to the extent of Rs. 186.00 Lakhs before 31.03.2008. The same is verifiable from the copy of the Bank account of the appellant with SBI. It is also seen from the Term Loan Account copy furnished by the appellant that the said bank has debited the appellant a sum of Rs. 700.00 Lakhs on 24.03.2008, by way of disbursement of Term Loan and has even charged interest of Rs. 1,68,767/- for the period 24.03.2008 to 31.03.2008, on such disbursement. The document conveying the land to the appellant vide sale deed dt. 07.03.2008 also confirms that the physical possession was handed over on the said date. The Assessing Officer ....
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....on the ground that the windmills are still under hypothecation with the bank and the Application to the Tamil Nadu Electricity Board was made only by the sister company and the loan taken from the bank continue to appear as liability in the books of the sister company. There was no evidence to show that there was a transfer of the windmills and that for the same property i.e., windmills, depreciation has been claimed both by the sister company and by the Assessee. Hence the Assessing Officer disallowed the claim of depreciation. On appeal it was found that possession had been handed over to the Assessee by the sister company which is the transferor and an invoice had been raised by the transferor company on the Assessee. A board resolution had also been passed by the Assessee for the purpose of windmills. The windmills had been used for the business of the Appellant and the income generated on such business was admitted for assessment by the Assessee. The Appellate Authority also found that the Assessee is a legal owner of the windmills and the possession of the property was also handed over to the Assessee and the fact that the windmills are still hypothecated with the bank in the....
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....n the appeal before the commissioner of income Tax(A), submission of the assessee was that commissioning certificate issued by the Executive Engineer(TNEB) on 08.03.05 clearly mentioned that it was tied up with the TNEB grid. As per the assessee, the said certificate also mentioned initial reading as on 05.03.05. Assessee argued that use of machine for trial production was as much use of a machine that would entitle it to claim depreciation. According to it there was no requirement that wind Mill should keep on producing power every day of the year and even if it had producing power only for a moment, it would be eligible for claim of depreciation. The AR of the appellant has objected the contention of the Assessing Officer in disallowing the depreciation claimed on the ground that the wind mill was not put in use. The AC has not considered the evidence produced before him establishing the wind mill generation being connected to the electricity grid before 31.03.2005 and generating the electricity and also receiving the payment from the TamilNadu Electricity Board. The wind mill Turbine generator (WTG) was connected to the grid for commissioning of 22kv enercon feeder and the feede....
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....cedents as mentioned above wherein the depreciation claimed by the assessee has been allowed in full as per law. The Appellant has argued that on similar lines the Assessing Officer may be directed to allow the claim of the Appellant as genuine and do the justice. On having gone through various case laws referred by the Appellant which are squarely applicable to the facts of the case and the claim made by the Appellant of depreciation on the windmills which were shown as assets in the depreciation schedule in its block of assets as on 3 1.03.2008, as well as various submissions made in favor of the claim for depreciation, it is amply made clear that the Appellant had paid an advance of Rs. 20,00,000/- for purchase of windmill of 1500 KV capacity from MIs Simran Wind project P Ltd. at a cost of Rs. 9,45,00,000/- were on 02.02.2008, subsequently on 14.02.2008 a further amount of Rs. 1,66,00,000/- has been paid by the company to the supplier of windmill. Further there was a sanction of term loan of Rs. 7,00,00,000/- by State Bank of India for acquisition of windmill on 19.03.2008 which has been disbursed by the State Bank of India on 24.03.2008. There was also subsequent payment of ....
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....y to the assessing officer, under Rule 46A of the Income Tax Rules, 1962 and therefore, the assessment deserved to be remitted back to the assessing officer for fresh consideration. 13. On the other hand, facts, such as, (a) placement of order, as early as in February' 2008, (b) payment of Rs. 1.86 Crores, by 14.02.2008, (c) payment by State Bank of India of Rs. 700 Lakhs by 24.03.2008, (d) payment of balance consideration of Rs. 0.59 Crores on 25.03.2008, (e) approval of transfer of windmill in favour of the respondent/assessee by TNEB, on 29.03.2008 and (f) generation of electricity and credit for the value, favouring the appellant for the period between 29.03.2008 and 31.03.2008, have been placed before the appellate authority. 14. For disbursement of term loan of Rs. 7 Crores on 24.03.2008, the State Bank of India, has even charged interest of Rs. 1,68,767/- for the period between 24.03.2008 and 31.03.2008. The respondent/assessee has also submitted that the sale deed, dated 07.03.2008, confirmed the physical possession. When evidence adduced at the appellate stage, was within the knowledge of the revenue, no contra material was produced to controvert the above. 15. Goin....
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....Nos.4 & 5 extract of the Minutes of the Meeting of the Board of Directors dated 08.02.2008 for purchasing the windmill from M/s.Simran Wind project P Ltd., paper book page Nos.6 to 10 purchase order for procuring the windmill from M/s. Simran Wind project P Ltd., dated 14.02.2008, paper book page Nos.11 & 12 receipt from M/s.Simran Wind project P Ltd., for Rs. 1,66,00,000/- dated 17.03.2008, paper book page Nos.13 to 26 sale deed for the purchase of the land dated 07.03.2008 on which windmill is erected, paper book page Nos.32 to 41 sanction letter and proof for disbursement of loan from State Bank of India dated 19.03.2008 amounting to Rs. 7/- crores, page Nos.44 to page 53 - documents issued by Tamil Nadu Electricity Board for purchase of power generated by the windmill from the assessee and proof for having purchased the power from the assessee before 31.03.2008, Page No.61 invoice dated 31.03.2008 from M/s. Simran Wind project P Ltd., on the name of the assessee for purchase of the windmill. The genuineness of these documents could not be satisfactorily confronted by the Revenue. Moreover we do not find Rule 46A being violated by the Ld.CIT(A) because the Ld A.R has....
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....Tax Department reiterated the very same grounds, before us, going through the material on record, we are of the considered view that the whole issue revolves only on the finding of fact recorded by the Commissioner of Income-Tax (Appeals), Trichy and confirmed by the Tribunal. Eligibility of the assessee, for allowance, with reference to Section 32 of the Income Tax Act, 1962, has been considered, in the light of the decisions, referred to above, with a categorical finding on all the issues raised, by the revenue. 21. On the facts and circumstances of the case, we are of the view that the Tribunal was right in holding that the assessee is entitled to depreciation, as the assessee had taken over the possession of the wind mill, and that the same was put to use and started generating electricity, before 31.03.2008, during the financial year, relevant to the assessment year 2008-09. Hence, the first substantial question of law raised, is answered against the revenue. 22. On the 2nd substantial question of law, this Court deems it fit to extract Rule 46A of the Income Tax Rules, 1962, which deals with production of additional evidence before the Deputy Commissioner (Appeals) and Comm....
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....late stage, is per se apparent on the face of the record. The only grievance of the revenue is that a remand report to have been obtained. 24. Paper Book Page Nos.32 to 41, produced before the Tribunal are sanction letter and proof for disbursement of loan from State Bank of India, dated 19.03.2008, amounting to Rs. 7/- crores. Among the other documents produced by the respondent/assessee, Paper Book Page Nos.44 to 53 are stated to be documents issued by the Tamil Nadu Electricity Board for purchase of power generated by the windmill from the assessee and proof for having purchased power from the assessee before 31.03.2008. 25. Going through the documents issued by the State Bank of India and the Tamil Nadu Electricity Board and other evidences, extracted supra, the Tribunal has observed that the genuineness of the documents has not been confronted by the Revenue. Same was the case before the Commissioner of Income Tax (Appeals). When production of evidence at the appellate stage, is permissible under the Income-Tax Act, 1961 and the Rules made thereunder, nothing prevented the Revenue from raising objections or to question the genuineness of the documents. 26. What is co....