TaxTMI 
TaxTMI 
2016 (9) TMI 598
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....e claim of depreciation of Rs. 3,78,00,000/-, 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. ....
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....appreciated that the assessee itself had admitted payment of Rs. 7.59 Crores, in the instalments in the months of May' 2008 and June' 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 r....
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.....03.2008 Energy Purchase Agreement entered into with TNEB by the appellant-Company 29.03.2008 Consumption of Electricity Generated from the said Wind Mill by the Appellant Company 10. Considering 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 24.03.200....
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....ntire bank loan which was taken by the sister company was also discharged by the Assessee. Therefore the Assessee is the owner for the purpose of the IT Act and the Assessee is entitled to claim depreciation. This was rejected by the Assessing Officer 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....
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.... on commissioning of 22 kv enercon Feeder. Therefore, as per the Assessing Officer, wind mill could not be considered connected to the grid till the Transformer was commissioned. Assessee having not put the wind mill to actual use, depreciation could not be allowed. In 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....
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..../Mds/2005 3. Atlost Expoit Enterprises Vs. DCIT Trichy 4. M/s.Velathal Spinning Mills Private Ltd., Vs. ACIT, Salem ITA No.202 & 203/Mds/2010. 5. Standard Textiles, Kaur Vs. DCIT, Trichy 6. P.Meenakshisundaram Vs. DCIT1n ITA No.26/Mds/2009 Several courts have held that as per the judicial precedents 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, subsequent....
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....tion sought by the assessing officer, as to how, the agreement could be entered on 20.03.2008, when the seller had issued invoice on 31.03.2008. Further contention has been made that the appellate authority has erred in accepting fresh evidence that the payment of Rs. 700 Lakhs was on 24.03.2008 and Rs. 59 Lakhs on 25.03.2008, without giving opportunity 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 e....
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.... before the Revenue based on which the Ld. CIT (A) had come to a conclusion that the windmill has been purchased before 31.03.2008 and commissioned. Paper book page No.2 Receipt for Rs. 20/- lakhs dated 14.02.2008 mentioning that the amount was received on 02.02.2008 from M/s. Simran Wind project Pvt. Ltd., Paper book page No.3 Receipt for Rs. 20/- lakhs from M/s.Simran Wind Project P Ltd., dated 02.02.2008, page 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 generate....
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....ctly it affects substantial rights of the parties, or (b) the question is of general public importance, or (c) whether it is an open question in the sense that the issue is not settled by a pronouncement of the Supreme Court or Privy Council or by the Federal Court, or (d) the issue is not free from difficulty, or (e) it calls for a discussion for alternative view. 20. Though Mr.J.Narayanasamy, learned Standing Counsel for the Income-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 o....
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....ness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271." 23. Facts that the respondent/assessee has filed documents, in respect of sequence of events, set out in the foregoing paragraphs of this judgment, have not been denied. Knowledge of the revenue to the documentary evidence adduced at the appellate 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....