AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1220
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....he case of Mahalakshmi Sugar Mills Co. Vs. CIT (123 ITR 429) and accordingly disallowed and added back to the income. 4. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the addition made by the AO holding that the interest liability on unpaid purchase tax would take the character of tax and required to be allowed as deduction on actual payment basis. Accordingly, the appeal of the assessee was dismissed by the Ld.CIT(A). For the sake of clarity, and convenience we extract para No.5.2 of Ld.CIT(A) order which reads as under : "5.2. I have considered the submissions. The interest liability on unpaid purchase tax would fall within the purview of "any sum payable by way of tax, duty, cess or fee (whatever name called wider any law for the time being in farce)." It would not fall within the purview of definition of interest u/s.2(28A) as there is no element of borrowing of money or incurring of debt or availing of credit facilty. Further, one of the purposes of section 43B is to ensure actual payment of the tax, duty fee or cess, etc., in respect of which tax benefit is availed by way of deduction. Such purpose of the legisl....
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....% 43094889 8080292 TOTAL 308447926 123379170 70615636 The AO disallowed the depreciation claimed by the assessee @80% and reworked the depreciation at 15% except in the case of 12.35 KVA turbine as per the details given. 7. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee. Aggrieved by the order of the Ld.CIT(A) the assessee filed the appeal before the Tribunal. 8. During the appeal hearing, the Ld.AR stated that this issue is squarely covered by the decision of this Tribunal in assessee's own case for the assessment year 2009-10 in ITA No.367/Viz/2013 dated 19.12.2014. In the appeal cited supra, the coordinate bench allowed higher rate of depreciation on the following items : (i) RCC Chimney (ii) Bagasse drier (iii) D.C.Drier (iv) 12.35 KVA turbine (v) Stam piping (vi) Coal& gas feeding system (vii) Coal handling system (viii) Sub-station tower line In the case of sub station tower line, the Hon'ble ITAT allowed the same as revenue expenditure. For the sake of convenience and clarity, we extract relevant part of the o....
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.... (a) Back pressure pass out, controlled extraction, extraction cum condensing turbines for co-generation along with pressure boilers. Before going further, we would consider the legal position on the issue. 19. In the case of South Madras Electric Supply Corporation Limited (supra), the Hon'ble Madras High Court has held that higher rate of depreciation to an electric supply corporation would include within its scope depreciation of service connection and parts including overhead cables and wires. At para-4, it is held that "in our opinion on that account, it cannot be said that electrical machinery in Cl. E should be read as excluding from its scope overhead cables and wires. The use of the expression "electric plant, machinery, boilers" in Cl. E appears to have been made in a comprehensive sense so as to include parts of the plant as well as electric machinery". 20. The Hon'ble Delhi High Court in the case of BSES Yamuna Powers Limited (supra) heldas follows: "We are in agreement with the view of the Tribunal that computer accessories and peripherals such as printers, scanners and server etc form an integral part of the computer system. In fact, the computer....
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....pySolvex Products Limited (supra), the Hon'ble M.P. HighCourt was considering the case of 100% depreciation on high efficiency boiler. The automatic coal supply system consisting of coal container, coal conveyer, bucket elevator and dust collecting system were considered as integral part of high efficiency boiler and 100% depreciation was directed to be allowed. The Hon'ble Court noted the observations of the Tribunal that the boiler will not function in the absence of coal supply system and hence, coal supply system was part and parcel of the boiler and held that the entire coal handling system is entitled to 100% depreciation. The Id CIT(A) disputed these findings of the Hon'ble M.P. High Court. We do not find much substance in the observations of the Id CIT(A) and hence we do not approve the same. 23. In the case of Andhra Organics vs Addl. CIT, 40 CCH 038(Hyd)(Trib), it was held thatthe claim of the assessee that it has commenced trial production in the absence of control panel cannot be accepted. The AO's findings in that case was that on search of internet, he found that the asset is a 3MW cogeneration captive power plant consisting of coal fired boiler wit....
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....erent parts was rejected. In the case at hand the term is used 'system'. Hence, even separate part, which constitutes 'system' are eligible to higher depreciation. This case relied upon by the revenue is of no avail. 27. In the case of Kerala Sponge Iron ltd vs ACIT, 32 ITR (Trib) 0718, relied upon by LdD.R., the Bench was considering the claim of the assessee for higher depreciation on the ground that certain equipments are 'pollution control equipment'. On facts, the Tribunal came to a conclusion that certain assets like air pollution control equipment and water pollution control equipment, etc do not qualify as pollution control equipment. This is a factual issue and has no relevance to the case at hand. 28. In the light of the above legal position, we now consider the contention of the assessee that the higher efficiency boiler and 12.65 KVA turbine have to be considered together along with other equipments necessary for generation of power, as the integrated cogeneration system. In our view, there cannot be two opinions that high efficiency boiler along with turbine and the associated equipments connecting them, increasing its efficiency etc., are....
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....e contentionof the appellant that expenditure incurred on substation power line is also part of the cogeneration system. This expenditure is necessary for onward distribution of the power generated in a cogeneration system and hence cannot be considered as an integral part of the cogeneration system. 34. We now consider the additional ground raised by the assessee on the issue ofexpenditure incurred on sub-station power line, which was ultimately handed over to APTRANSCO. Both the parties agreed that this is legal claim and that the facts are on record. Under these circumstances, we hold that the Id CIT(A) should have admitted this additional ground of the assessee and adjudicated the same following the decision of Hon'ble Supreme Court in the case of NTPC Ltd., (supra). 35. Coming to allowability of this claim, the Hon'ble Rajasthan High Court in the case of CITvs. Hindustan Zinc Ltd., (2009) 221 CTR (Raj) 637 considered the following question No.2 and answer as follows: "Coming to the question No.2, it is to be noticed that the power line had been erected by the assessee for facilitating routine operations and smooth functioning of the business of the assessee. I....