2012 (2) TMI 640

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....ditional depreciation on Wind Mill purchased during the year at Choudhary Exports Dhule, Maharashtra, amounting to Rs. 57,28,703 on the ground that Electricity is neither an article nor a thing." 2. Facts in brief:- The assessee is a partnership firm and the Assessing Officer has described the nature of business at col. 10 of the assessment order as "manufacturing and trading woolen carpets and electricity generation by wind mills". The assessee claimed additional depreciation @ 80% on a wind mill at Dhule. The Assessing Officer disallowed the same by holding that there should be manufacture and production of any article or thing for claiming additional depreciation under section 32(1) clause (iiia). He held that the production of ....

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....s allowable business expenses in the case of Modi Motors, ITA No.6900/M/ 2006 by Hon'ble ITAT Mumbai. In the case of B.N.Exports ITA No.2714 of 2009 dated 31 .2.2010 the Hon'ble High Court of Bombay has also held that the premium paid for partners lives in keyman insurance policy is an allowable business expenditure.  (c) The partners are separate and identifiable entities and cannot be held as identical with the firm. Salary and remuneration received from the firm are taxed in the hands of the partners. (d) According to the scheme of the keyman insurance policy the receipts on maturity are taxable in the hands of the firm. Therefore premium expenses, if any, also has to be allowed in the hands of the firm. T....

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....ws relied upon by the assessee are the case laws where the power generation in question was of captive unit unlike the case of the assessee. On the argument that similar depreciation has been allowed in the earlier year and subsequent year, the learned Departmental Representative submitted that resjudicata does not apply to the income tax procedure. 7. Rival contentions heard. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record, as well as the case laws cited before us, we hold as follows:- 8. The Assessing Officer, in his order, has recorded that the assessee is in the business of manufacture and trading of woolen carpets. The Hon'ble Madras High Court in Texmo Precision Cast....