TaxTMI 
TaxTMI 
2016 (11) TMI 1122
X X X X Extracts X X X X
X X X X Extracts X X X X
.... raised the following grounds No.1 and 2:- "The learned CIT (Appeals) -19 erred in, 1. Confirming addition to total income of Rs. 37,50,000/- out of contribution for common infrastructure facility for power evaculation and not considering it as revenue expenditure, alternatively not treating the said expenditure as part of windmill, alternatively not treating the said expenditure as capital expenditure covered under intangible asset', 2. Not admitting the following additional grounds of appeal filed before CIT (A)-19 during the course of hearing. * Claiming the expenditure of Rs. 37,50,000/- towards contribution for common infrastructure facility for power evaculation as revenue expenditure. * Alternatively, claiming the expenditure of Rs. 37,50,000/- towards contribution for common infrastructure facility as part of windmill cost. * Claiming additional depreciation u/s 32(1) (iia) on the cost of windmill. 3. At the outset, the learned Counsel for the assessee first of all taken us through Para 7 of the CIT (A)'s order wherein it was explained that the above grounds were raised before the CIT (A) for the first time. It was explained before the CIT (A) that the payme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngible is a part of Wind Mill, requires fresh investigation into facts. Otherwise also it has already been held that no cost of power evacuation facility is to be borne by the appellant. 9.3 On the facts of the case it is evident that all these grounds were available to the assessee at the time of filing of t he return itself. There is no development neither by way of any amendment to statute nor by way of a judicial pronouncement after filing of the return and more significantly after filing of the appeal. 9.4 Therefore, applying the judgment of the Supreme Court in Jute Corporation of India (supra) as explained by Supreme Court in NTPC (supra) and also explained by Bombay High Court - Ahmedabad Electricity (supra) it cannot be said that the Additional grounds could not have been raised at the stage when the return was filed or when the assessment was passed or that the ground became available only after filing of appeal on account of change of circumstances or law. No change of circumstances or law subsequent to filing of appeal has been shown. Therefore, it cannot be said that the additional grounds so raised are bonafide and that the same could not have been raised earlier ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on foundation work. 2. On the facts and circumstances of the case and in law, the learned CIT (A) erred in allowing higher rate of depreciation on civil work for foundation by following the order of the honorable ITAT, Jodhpur in the case of Delhi Rajasthan Transport Co. without appreciating the fact that the said order is not binding in Mumbai and is ambiguous as the honorable ITATs in one part of its said order held that foundation of the windmill is part and parcel of the windmill and eligible for depreciation at higher rate, where as in other part is also held that civil work is not an integral part of windmill and is not eligible for higher depreciation". 6. Brief facts leading to this issue are that the assessee has claimed the cost of wind mills as under:- Cost of Windmill 4,99,13,080/- Civil Work for foundation 33,64,627/- Erection of HT Line 31,41,435/- Erection assembly 12,10,000/- The assessee before the AO claimed the costs of foundation erection on HT line erection of assembly are integrated part of the Windmill and depreciation on these items is admissible at the rate applicable to Windmill. The assessee before the AO referred to Clause XIII of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ponents and can be replaced independently of the Switchgear and HT Lines. (iii) The same Switchgear and HT Lines can be used for new Windmill or different Windmill. 4.6 Hence, the above order of the ITAT regarding the other civil work, or allied works, wherein it has been held to be not an integral part of the Windmill and not eligible for depreciation at higher rate, is applicable in this case. Applying the same, it is hereby held that Switchgear and HT Lines are not integral part of the Windmill and hence they are not eligible for depreciation at higher rates., but they are eligible for depreciation at normal rates. In the result this ground is allowed in part". Aggrieved, now the assessee is in second appeal against allowance of normal rate on HT Lines and Switchgear and the Revenue is in second appeal against allowance of higher depreciation on civil works. 7. We have heard the rival contentions and gone through the facts of the case. Before us, the learned Counsel for the assessee filed copy of the judgment of the Hon'ble Punjab & Haryana High Court in the case of CIT-I, Ludhiana Vs M/s. Eastman Impex ITA No.350 of 2013 Order dated 18-12-2014 wherein exactly identical ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cture and the electric fittings, equipments are part and parcel of the windmill and cannot be separated from the same. The assessees claim for higher depreciation on such investment was, therefore, rightly allowed". 7. We are in absolute agreement with the reasonings given by the Hon'ble Gujarat High Court. We accept the same and for the same reasons these appeals are dismissed". In view of the above precedence of the Hon'ble Punjab and Haryana High Court and the Hon'ble Rajasthan High Court and the facts of the present case, we are of the considered opinion that the civil work foundation, erection of HT Lines and Switchgear etc. are integral part of Windmill and it cannot be viewed separately from Plant & Machinery. Accordingly, we are in agreement with the arguments of the learned Counsel for the assessee that the civil work for foundation is integral part of the Plant & Machinery and it cannot be viewed separately from Plant & Machinery for which foundation is laid. Similarly, HT Lines and Switchgear etc. are also integral part of Windmill and hence, eligible for higher rate of depreciation i.e. rate applicable on Windmill. We direct the AO accordingly. This common issue in ....