TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 1655
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....r short 'Act') for A.Y 2011-12 and A.Y 2012-13, dated 21.03.2017 and 23.03.2017, respectively, which in itself arises from the respective assessment orders passed by the Dy. Commissioner of Income tax, Central Circle- 3(1), Mumbai u/s. 153A r.w.s. 143(3) of the 'Act', each dated 30.03.2015, in the case of Wind World Wind Resources Development Pvt. Ltd., Mumbai, which had been assailed before us as I.T.A. No(s).2371-2372/Mum/2017; AND the order passed by the Principal Commissioner of Income tax, Central-2, Mumbai under Sec. 263 of the Income tax 1961, which in itself arises from the order passed by the Dy. Commissioner of Income tax, Central Circle-3(1), Mumbai u/s. 153A r.w.s. 143(3) of the 'Act', dated 24.03.2015, in the case of J.N Investment & Trading Co. Pvt. Ltd., Mumbai, which had been assailed before us as I.T.A. No.2373/Mum/2017. That as certain common issues are involved in the aforesaid appeals, therefore, they are taken up and being disposed of by way of a consolidate order. We first take up the appeal for A.Y. 2007-08 in I.T.A. No.2370/Mum/2017. The assessee assailing the order passed by the Principal Commissioner of Income tax, Central-2, Mumbai....
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....Rs. 9,53,44,278/-. 4. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2007-08, and observed that the assessee during the year under consideration had reflected 'business operating income' at Rs. Nil. That it was noticed by the Principal CIT that the assessee in its 'Profit & loss a/c' for the year under consideration, viz. AY: 2007-08, had after debiting operating and other expenses of Rs. 2,40,70,708/- and depreciation of Rs. 1,03,03,651/-, shown a 'business loss' of Rs. 3,43,74,359/-. The A.O further observed that the assessee in its 'Computation of income' after claiming 'depreciation' of Rs. 7,14,98,291/ on the 'fixed assets' as per the provisions of the Income-tax Act, had computed the 'business loss' at Rs. 9,53,44,278/- , which was carried forward by it for further adjustment/set off in the subsequent years. The Principal CIT on the perusal of the records noticed that though the assessee company had not carried out/commenced any business during the year under consideration, but the expenses debited in its '....
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.... Sec. 132 in its case, no proceedings for the year under consideration, viz. AY: 2007-08 were pending, therefore, in the absence of any incriminating evidence found during the course of the search & seizure proceedings, no addition/disallowance was permissible in respect of the unabated assessment of the assessee for the year under consideration. The assessee in support of its contention relied on the following judgments/orders of the Hon'ble High Court of Bombay and the 'Special Bench' of ITAT, Mumbai:- (i) CIT v. Murli Agro Product [2014] 49 taxmann.com 172 (Bom.) (ii) CIT v. Continental Warehousing Corpn. (Nhava Sheva) Ltd. [2015] 374 ITR 645 (Bom.) (iii) All Cargo Global Logistics Ltd. v. Dy. CIT [2012] 137 ITD 287 (Mum.). (iv) Asstt. CIT v. Pratibha Industries Ltd. [2013] 141 ITD 151 (Mum.). 7. The Principal CIT after deliberating on the aforesaid contentions of the assessee, though did not deny the factual position that no incriminating material was found during the course of the Search & Seizure proceedings conducted on the assessee u/s. 132(1), but however, being of the view that the A.O had wrongly allowed the carry forward of the business loss of Rs. ....
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.... engaged in the business of setting of infrastructure facilities for evacuation of power generator through wind power projects. The ld. A.R submitted that during the year under consideration the assessee company had installed a Sub-station at a cost of Rs. 75,95,76,905/-, and to fortify his said contention took us through the 'Schedule' of 'Fixed assets' forming part of the 'balance sheet' of the assessee company for the year under consideration (Page 10 of 'APB'). It was averred by the ld. A.R that though the aforesaid sub-station was put to use during the year under consideration, however, the assessee had started billing the parties in the next year. The ld. A.R in order to drive home his contention that the installation of the sub-station had taken place during the year under consideration, drew our attention to a 'Provisional certificate' issued by the Dy. Chief Electrical Inspector (Rajkot), wherein the latter had verified that the inspection of the electrical installations of the transformer of M/s. Enercon (India) Ltd. at Village Bhogot, Near Bhatia, District Jamnagar, was carried out by the department on 29.12.2006 (Page 251 of '....
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....rating on the facts of the case in light of the aforesaid settled position of law, had thus taken a plausible view and concluded that in the absence of any incriminating material having been found during the course of the Search & seizure proceedings conducted on the assessee u/s 132(1), no other addition could be made in respect of the unabated assessment of the assessee for the year under consideration. It was thus submitted by the ld. A.R that the said plausible view of the A.O which was backed by the order of the 'Special bench' of the jurisdictional Tribunal, which was specifically relied upon by the assessee during the course of the assessment proceedings, thus, could not be characterized as an erroneous view. The ld. A.R further submitted that the issue that in case of an unabated assessment no addition in the absence of any incriminating material emerging during the course of the Search & seizure proceedings conducted u/s 132(1) can be made in the hands of an assessee, is no more res integra in light of the judgments of the Hon'ble Jurisdictional High Court in the case of (i). CIT Vs. Murli Agro Products Ltd. (ITA No. 36 of 2009); dt. 29.10.2010; (ii). CIT Vs. C....
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....pite absence of any pending assessment or reassessment proceedings, in a case where earlier no assessment or reassessment had been framed prior to the Search & seizure proceedings conducted on the assessee u/s 132(1), but the same is preceded by a mere processing of the 'return of income' by way of an intimation u/s. 143(1), there would thus be no occasion to characterise the same as an unabated assessment. It was thus submitted by the ld. D.R that in a case where the 'return of income' of the assessee had merely undergone a summary acceptance u/s 143(1), then in the backdrop of the absence of any assessment earlier having been framed, the entire assessment in the case of the assessee would be qua open before the A.O. Thus, it was the case of the Ld. D.R. that in the absence of an assessment in a case where the 'return of income' had been summarily processed u/s. 143(1), the same despite absence of any pending assessment or reassessment proceedings in the hands of the assessee cannot be characterised as an unabated assessment. The ld. D.R in her attempt to fortify her contention, therein referred to Para 58(b) of the order passed by the 'Special Bench....
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....tted that in the case of 'first time' assessment framed by the A.O as per the provisions of section 153A, the entire assessment for the year under consideration would be qua open before the A.O. The ld. D.R thus submitted that the appeal of the assessee was devoid of any force, both on merits and on law. The ld. D.R averred that the Principal CIT after duly appreciating that the A.O in the absence of the necessary verifications had failed to disallow expenses and had wrongly allowed depreciation as claimed by the assessee, had thus rightly held the assessment order as erroneous and prejudicial to the interest of revenue and revised the same u/s. 263 of the 'Act'. 10. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and find that the fact that no incriminating material was found during the course of search and seizure action conducted u/s. 132(1) on the assessee on 14.03.2013, had neither been disputed by the Principal CIT, nor controverted by the ld. D.R before us. We find that our indulgence in the pr....
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....e, shall abate. Provided also that the Central government may by rules made by it and published in the official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has been abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation - For the removal of doubts, it is hereby declared that - (i) &n....
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....he date of initiation of the Search & seizure proceedings, then, irrespective of the fact that the return of income of the assessee had only been summarily processed under Sec. 143(1), the proceedings for the said year can safely be held to be unabated. 13. We find that our aforesaid view also stands fortified from the very fact that sub-section (2) of Section 153A further contemplates that where any order of assessment or reassessment made u/s. 153A(1) is annulled on a further appeal or any other legal proceedings, then, notwithstanding anything contained in Sec.153A(1) or section 153, the assessment or reassessment relating to any assessment order which had earlier abated under the second proviso of sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner of Income tax or Commissioner of Income tax. We are of the considered view that a revival of an assessment or reassessment relating to any assessment year which had earlier abated under the second proviso of Sec. 153A(1), in a situation where the proceedings initiated or any order of assessment or reassessment made under Sec. 153A(1) is annulled on a ....
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.... of initiation of the search & seizure action, cannot be held to have been abated, stands fortified. 14. We further find that our aforesaid view that in a case where on the date on which Search & seizure proceedings had been initiated no assessment or reassessment is pending, then without prejudice to the fact that prior to the date of Search & seizure proceedings, the income of the assessee for the year under consideration was only processed under Sec. 143(1) and no assessment or reassessment had earlier been framed, the assessment under Sec. 153A for the said year can only be proceeded with on the basis of the incriminating material found during the course of the said Search & seizure proceedings, is squarely covered by the order of a coordinate bench of ITAT, Mumbai in the case of Anil Mahavir Gupta v. Asstt. CIT [2017] 82 taxmann.com 122 (Mum. - Trib.), wherein it was observed as under: "7.12 Before parting, we may refer to the argument set up by the Ld. Departmental Representative to the effect that the aforesaid proposition of law laid down by the Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (NHAVA SHEVA) Ltd. (supra) is not applicable i....
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....d the issue is no more res integra in light of the judgments delivered in the case of (i) Murli Agro Products Ltd. (supra); (ii) Continental Warehousing Corpn. (supra); and (iii) Continental Warehousing Corpn. (Nhava Sheva) Ltd. (supra). We have deliberated on the facts r.w the settled position of law and are of the considered view that as the A.O remaining within the four parameters of law had passed the assessment order u/s. 153A r.w.s 143(3), dated, 27.03.2015, therefore, the said assessment cannot be faulted with and held to be "erroneous". We thus are of the considered view that now when the assessment order passed by the A.O is not found to be "erroneous", therefore, the Principal CIT had wrongly assumed jurisdiction and revised the order in exercise of the powers vested with him u/s 263 of the 'Act'. We thus set aside the order passed by the Principal CIT under Sec. 263 of the 'Act' and restore the order passed by the A.O under Sec. 153A r.w.s 143(3), dated. 27.03.2015. The Grounds of appeal No. 1 to 3 raised by the assessee are allowed. That as the Ground of appeal No. 4 is general, therefore, the same is dismissed as not pressed. 16. The appeal of the asse....
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....ia) Ltd.] was covered in the aforesaid search proceedings. 19. The assessee had filed its original 'return of income' for A.Y. 2011-12 on 29.09.2011, declaring an income of Rs. 8,82,69,613/- under normal provisions and 'Book profit' of Rs. 17,54,27,378/- u/s 115JB of the 'Act'. That subsequent to the aforesaid search and seizure proceedings the assessee filed its 'return of income' u/s 153A of the 'Act' on 28.02.2014, declaring an income of Rs. 8,82,69,613/- under the normal provisions and 'Book profit' of Rs. 17,54,27,378/- u/s 115JB as per the MAT provisions. The assessment in the case of the assessee was framed by the AO vide order dated 30.03.2015 passed u/s 153A r.w.s. 143(3) of the 'Act' and the income of the assessee was assessed at Rs. Nil under the normal provisions, while for the 'book profit' u/s 115JB was computed at Rs. 17,54,27,378/-. 20. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2011-12, and observed that the A.O had allowed total depreciation of Rs. 8,72,84,028/- as claimed by the assess....
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....e u/s 263 of the 'Act', therein called upon the assessee to show cause as to why the assessment framed u/s 153A r.w.s. 143(3) may not be revised in order to withdraw the additional depreciation of Rs. 1,74,56,805/-, which as per him was wrongly allowed by the A.O while framing the assessment. The assessee in his reply filed before the Principal CIT, taking support of various judicial pronouncements, submitted that as electric energy had all trappings of an article or thing, therefore, the process of its generation was also akin to manufacture or production of articles or things. The assessee thus tried to impress upon the Principal CIT that the wind turbine generators were used for generation of electricity, which is akin to manufacturing of an article or thing as the electricity is intangible and its effect can be seen and felt, transferred, delivered, stored, processed etc. It was thus submitted by the assessee that it was entitled towards the claim of additional depreciation in respect of the new plant and machinery purchased and installed by it for generation of electricity. It was averred by the assessee that though the amendment in Sec. 32(1)(iia) to include the busin....
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....ssment order to the file of the A.O, with the direction to examine the claim of the assessee towards additional depreciation afresh and complete the assessment, as per law. 23. The assessee being aggrieved with the order passed by the Principal CIT under Section 263, had carried the matter in appeal before us. That the Ld. Authorized representative (for short 'A.R') for the assessee assailing the order of the Principal CIT, therein averred that as the assessee was engaged in the business of generation of electricity by harnessing wind energy and the electricity so generated was an "article or thing" within the meaning of Sec. 32(1)(iia), therefore, its claim for additional depreciation was rightly allowed by the A.O while framing the assessment. It was thus submitted by the Ld. A.R that now when the electricity generated by the assessee is an "article or thing", which can be traded, which can be measured, which can be stored and also exchanged, therefore, the claim of the assessee towards additional depreciation u/s 32(1)(iia) on satisfaction of all the requisite conditions contemplated under the said statutory provision, thus, could not be characterized as erroneous. It w....
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....y, prior to 01.04.2013, or not. We have deliberated on the scope and gamut of Sec. 32(1)(iia) as was available on the statute prior to 01.04.2013. We find that as per the pre- amended Sec. 32(1)(iia), the additional depreciation of a further sum equal to twenty percent of the actual cost of such machinery and plant was available in the case of any new machinery or plant (other than ships and aircrafts) which had been acquired and installed after the 31st day of March, 2005, by an assessee engaged in the business of manufacture or production of any article or thing. We are of the considered view that for adjudicating as to whether the assessee would be entitled to claim additional depreciation in A.Y 2011-12, our focus has to be confined to the conditions contemplated in the said statutory provision, viz. Sec. 32(1)(iia), as was available on the statute at the relevant point of time. We are of the considered view that cumulative satisfaction of the conditions contemplated in the said statutory provision, viz. Sec. 32(1)(iia), as was applicable during A.Y. 2011-12, would duly entitle an assessee for claim of additional depreciation contemplated therein. 25. We thus in the backdrop o....
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.... CIT v. VTM Ltd. and CIT v. Hi Tech Arai Ltd., allowed the appeal. As against the same, the Revenue preferred an appeal before the Income Tax Appellate Tribunal, which dismissed the appeal following the decision of this Court in the case of CIT v. VTM Ltd. It is stated by the Tribunal that as against the said decision of this Court, the Revenue preferred an appeal before the Supreme Court and the Supreme Court dismissed the same in the SLP stage itself. Hence, the Tribunal held that no material has been brought on record to show that the said decision of this Court in the case of CIT v. VTM Ltd. has been either modified or reversed by the Supreme Court. 3. Aggrieved by the said order of the Tribunal, the Revenue is before this Court. 4. Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 5. In the decision reported in [2010] 321 ITR 477 (Mad) (COMMISSIONER OF INCOME-TAX v. HI TECH ARAI LTD.), this Court, while considering the scope and application of Section 32(1)(iia) of the Income Tax Act, held as follows: "As far as application of section 32(1)(iia) of the Act is concerned, what is required to be satisf....
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....rted in [2010] 321 ITR 477 (Mad) (COMMISSIONER OF INCOME-TAX v. HI TECH ARAI LTD.).' In this regard it would be relevant and pertinent to point out that the Hon'ble High Court of Madras had earlier in the case of CIT v. VTM Ltd. [2009] 319 ITR 336/[2010] 187 Taxman 319, had upheld the order of the Tribunal and therein concluded that as the business of generation of electricity by wind mill amounts to production of an article or thing, therefore, the assessee would be entitled to additional depreciation u/s 32(1)(iia). The revenue being aggrieved with the order of the Hon'ble High Court had preferred a 'Special Leave Petition' (SLP), which was dismissed by the Hon'ble Apex Court. That still further the Hon'ble High Court of Madras in the case of Pr. CIT v. Kanishk Steel Industries [2016] 96 CCH 292, vide its order dated 22.08.2016, had dismissed the appeal filed by the revenue on the issue pertaining to the admissibility of additional depreciation u/s 32(1)(iia). We further find that a coordinate bench of the Tribunal in the case of Dy. CIT v. J.K. Cement [2017] 82 taxmann.com 338 (Luck - Trib.), adjudicating on the issue as regards the admissibility of ....
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....The electricity can be transmitted, transferred, delivered, stored, possessed etc. The Hon'ble Supreme Court in the case of the CST v. Madhya Pradesh Electricity Board (supra) has held that electricity falls within the definition of goods under the provisions of Sale of Goods Act, 1930. The Delhi Bench of the Tribunal in the case of NTPC Ltd. (supra) after a detailed examination of several judgements, Acts, Constitution of India, has concluded that the process of generation of electricity is akin to manufacture of an article or thing. 10. In view of the above, we are of the considered opinion that generation of electricity is a manufacturing activity. The assessee is involved in the manufacturing activity and fulfills the conditions as laid down under section 32(1)(iia). The Government vide Finance Act, 2012 has amended the provisions of section 32(1)(iia) to include the business of generation or generation and distribution of power, eligible for benefit under section 32(1)(iia). Although the said amendment is with effect from 1.4.2013 but it gives impetus to the view that generation of electricity is a manufacturing process and qualifies for the benefits under section 32(1)(....
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...., vide the Finance Act, 2012, but then the entitlement of the assessee at the relevant point of time, viz. A.Y. 2011-12, has to be adjudicated by strictly confining ourselves to the conditions contemplated under the aforesaid statutory provisions, viz. Sec. 32(1)(iia), which as observed by us at length hereinabove, had duly been satisfied by the assessee. We are of the considered view that now when the generation of electricity by harnessing wind energy by the assessee can safely and rather inescapably be characterized as manufacturing or production of any article or thing, therefore, there is no reason for us to hold that the assessee despite having satisfied all the requisite conditions contemplated in Sec. 32(1)(iia), would however still stand disentitled and deprived of its claim of additional depreciation. We have deliberated at length on the aforesaid judgments of the Hon'ble Supreme Court, Hon'ble High Court and the coordinate benches of the Tribunal, and finding no reason to take a different view, thus respectfully follow the same and conclude that the assessee was duly entitled towards claim of additional depreciation u/s 32(1)(iia). We thus being of the considered....
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....sed by the assessee in respect of initial depreciation on the fixed assets of Rs. 13,09,26,042/- and 4,36,42,014/-, which were claimed by the assessee to have been put to use on 26.03.2011 and 30.03.2011, respectively. We are of the considered view that now when the assessee had never been put to notice in respect of the revision of the order on the aforesaid ground, therefore, the latter had no occasion to put forth an explanation before the Principal CIT in context of the issue under consideration. We thus being of the considered view that a revision of an order passed by an A.O cannot be carried out in respect of an issue without putting the assessee to notice as regards the seeking of revision and affording an opportunity of being heard to him, as regards the same, therefore, the order passed by the Principal CIT u/s 263, to the extent he had directed the A.O to further examine the claim of the assessee in respect of initial depreciation on the addition of the fixed assets of Rs. 13,09,26,042/- and 4,36,42,014/- which were claimed by the assessee to have been put to use on 26.03.2011 and 30.03.2011, respectively, without affording any opportunity to the assessee to put forth an....
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....und during the course of the Search & seizure proceedings, is not borne from the records. We thus in the backdrop of the aforesaid facts, are unable to persuade ourselves to accept the aforesaid contention of the assessee on the very face of it. We are of the considered view that as the order passed by the Principal CIT under section 263 of the 'Act' had already been set aside and the order passed by the A.O under Sec. 153A r.w.s 143(3) had been restored by us on merits while disposing of the Grounds of Appeal No. 1 & 2 raised by the assessee before us, therefore, in the absence of complete set of facts required for adjudicating the Ground of Appeal No. 4 raised by the assessee before us, which we are of the considered view is rendered as academic, therefore, refrain from adjudicating the same. 30. The Ground of Appeal No. 5 being general in nature, is thus dismissed. 31. We thus in terms of our aforesaid observations set aside the order passed by the Principal CIT under Sec. 263 of the 'Act', and thus restore the order passed by the A.O under Sec. 153A r.w.s. 143(3). 32. The appeal of the assessee is thus partly allowed in terms of our observations. ITA No. 237....
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.... that as the additions of the respective assets was made in the second half and put to use subsequently, therefore, the assessee had failed to examine the admissibility of the claim of the assessee in respect of 100% depreciation on the said fixed assets. The Principal CIT further observed that as per the provisions of Sec. 32(1)(iia), additional deprecation @20% of actual cost of plant and machinery acquired and installed after 31.03.2005, was only allowable to an assessee who was engaged in the business of manufacture or production of any article or thing. That in the backdrop of the aforesaid observations the Principal CIT held a conviction that as per Sec. 32(1)(iia) the additional depreciation was though allowed in respect of those plant and machinery which were used for manufacturing or production of an article or a thing, but however such plant and machinery which were not used for the said purpose, did not qualify for additional depreciation. It was further observed by the Principal CIT that Sec. 36(1)(iia) was amended by the Finance Act, 2012 to allow the additional depreciation to the assesses who were engaged in the business of generation or generation and distribution o....
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....nufacturing of a product, as the electricity is intangible and its effect can be seen and felt, transferred, delivered, stored, processed etc., therefore, the assessee was entitled towards the claim of additional depreciation in respect of the new plant and machinery purchased and installed by it for generation of electricity. It was averred by the assessee that though the amendment to include the business of generation or generation and distribution of power was applicable w.e.f. 01.04.2013, the basic concept for claim of additional depreciation remained the same, and thus now when the assessee duly satisfied all the requisite conditions entitling it to claim additional depreciation, therefore, the order passed by the A.O u/s 153A r.w.s. 143(3), allowing the additional depreciation could not be held to be erroneous. The assessee in order to drive home his contention that electricity was an article or thing, therein submitted that it had generated electricity by harnessing wind energy and earned income from sale of electricity generated which was measured and traded in units known as 'Killowatts'. The assessee in order to drive home its aforesaid contention that it stood du....
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....ue under consideration in the backdrop of the judicial pronouncements of different Hon'ble Courts and coordinate benches of the Tribunal, had concluded that as the assessee who was engaged in the business of generating electricity by harnessing wind energy, duly satisfied the requisite conditions contemplated u/s 32(1)(iia) (as was then so available on the statute), was thus entitled for claim of additional depreciation under the said statutory provision. That as facts and the issue involved in the present appeal are the same as were there before us in the appeal of the assessee for A.Y. 2011-12, in ITA No. 2371/Mum/2017, therefore, our order passed in respect of the issue under consideration would apply mutatis mutandis for adjudicating the issue under consideration in the present appeal of the assessee for AY. 2012-13, marked as ITA No. 2372/Mum/2017. The Grounds of Appeal No. 1 & 2 raised by the assessee before us are allowed. The Ground of Appeal No. 3 being general is dismissed as not pressed. The appeal of the assessee is thus allowed in terms of our observations and reasoning's recorded in context of the issue under consideration, while disposing of the appeal of the....
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....s and 'Book profit' of Rs. 18,62,53,115/- u/s 115JB as per the MAT provisions. The assessment in the case of the assessee was framed by the A.O vide order dated 24.03.2015, passed u/s 153A r.w.s. 143(3) of the 'Act', assessing the total income as declared in the return of income filed by the assessee. 42. The Principal Commissioner of Income tax, Central-2, Mumbai deliberated on the assessment records of the assessee for the year under consideration, viz. A.Y. 2011-12, and observed that the A.O had allowed total depreciation of Rs. 17,60,29,601/- on Wind Turbine Generator (including additional depreciation of Rs. 3,52,00,000/-), as claimed by the assessee. It was observed by the Principal CIT that the assessee had made addition of asset of "Wind Turbine Generator" aggregating to Rs. 17,60,00,000/- during the year, which were claimed by the assessee to have been put to use on or before 30.09.2011, and as such for a period of than 180 days during the year. That it was observed by the Principal CIT that depreciation of Rs. 14,08,29,601/- @ 80% on the aforesaid assets was allowable, however, the depreciation had been allowed at Rs. 17,60,29,601/- (which included additi....
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....t be revised in order to withdraw the additional depreciation of Rs. 3,52,00,000/- which was wrongly allowed by the A.O while framing the aforesaid assessment. The assessee in his reply, taking support of various judicial pronouncements, submitted before the Principal CIT that as electric energy had all trappings of an article or thing, therefore, the process of its generation was also akin to manufacture or production of articles or things. The assessee thus tried to impress upon the Principal CIT that as per the settled position of law, the wind turbine generator were used for generation of electricity, which is akin to manufacturing of a product, as the electricity is intangible and its effect can be seen and felt, transferred, delivered, stored, processed etc., therefore, the assessee was entitled towards the claim of additional depreciation in respect of the new plant and machinery purchased and installed by it for generation of electricity. It was averred by the assessee that though the amendment to include the business of generation or generation and distribution of power is applicable w.e.f. 01.04.2013, the basic concept for claim of additional deprecation remained the same....
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....e matter in appeal before us. We find that the primary issue involved in the present appeal boils down to the entitlement of the assessee which is engaged in the business of generating electricity by harnessing wind energy in respect of additional depreciation contemplated u/s 32(1)(iia) of the 'Act'. We are of the considered view that as the said issue had already been adjudicated by us while disposing of the appeal filed by the 'sister concern' of the assessee, viz. Wind World Infrastructure India Pvt. Ltd. for A.Y. 2011-12, marked as ITA No. 2371/Mum/2017, wherein we had after deliberating at length on the issue under consideration, in the backdrop of the judicial pronouncements of different Hon'ble Courts and coordinate benches of the Tribunal, had therein concluded that the assessee who was engaged in the business of generating electricity by harnessing wind energy, satisfied the requisite conditions contemplated u/s 32(1)(iia) (as was then so available on the statute), therefore, was duly entitled for claim of additional depreciation under the said statutory provision. That as the facts and the issue involved in the present appeal are the same as were ther....
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.... the latter had failed to verify the claim raised by the assessee in respect of initial depreciation on fixed assets of Rs. 17,60,00,000/-, in the backdrop of the period for which the said assets were put to use by the assessee during the year. We are of the considered view that now when the assessee had never been put to notice in respect of the revision of the order on the aforesaid ground, therefore, the latter had no occasion to put forth an explanation before the Principal CIT in context of the issue under consideration. We thus being of the considered view that a revision of an order passed by an A.O in respect of an issue cannot be carried out without putting the assessee to notice and affording an opportunity of being heard to him, as stands contemplated u/s 263(1) of the 'Act', in respect of the said issue, therefore, the order passed by the Principal CIT u/s 263 to the extent directing the A.O to further examine the claim of the assessee in respect of initial depreciation on the addition of fixed assets of Rs. 17,60,00,000/- made during the year, without affording any opportunity to the assessee to put forth an explanation as regards the same, cannot be sustained.....