2013 (11) TMI 1733

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....a consolidated order is being passed for the sake of convenience and brevity. 2. All the appeals of the Reven2 ue and the cross-objections of the assessee arise from a consolidated order of the CIT(A) dated 18.12.2012 for the captioned assessment years which, in-turn, has arisen from assessment orders passed by the Assessing Officer u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961 (in short "the Act") for each of the assessment years. The sum and substance of the dispute in the captioned proceedings relates to the depreciation on the cost of Windmill. The Assessing Officer noticed that during the assessment year 2003-04, assessee had installed a Windmill costing of Rs. 4,65,00,000/-. On the entire cost of windmill, depreciation was cla....

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....ibuted to 3th e cost of foundation of Windmill so as to be eligible for depreciation @ 80% and the balance 60% of the cost of civil work, etc. is held to be eligible for the depreciation @ 10%, being buildings/roads. Against the aforesaid decision of the CIT(A), Revenue as well as assessee are in appeal before us. 4. The Revenue has contested the partial relief allowed by the CIT(A) whereas the assessee by way of cross-objection No.3 has contested that the entire civil cost of Rs. 20,00,000/- be considered as an integral part of the cost of Windmill by applying the 'functional test' and thus be allowed depreciation at the higher rate. 5. In this background, we have considered the rival submissions. It was a convergence of opinion betw....

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....the cost of civil work, etc. amounting to Rs. 20,00,000/- which shows that it is a composite bill for foundation of Windmill, Plinth for Transformer, Windmill Control Room, Site Development and Internal Road Development, etc.. It is in this context, on being unable to decipher the exact cost of the civil foundation work for Windmill/Transformer, the learned CIT(A) has apportioned the cost between the buildings/roads and Windmill in the ratio of 60:40. The learned counsel vehemently pointed out that though separate costs were not enumerated by Suzlon Developers Private Limited who had undertaken the execution of work, yet the items of civil work on account of buildings/roads was minimal and therefore apportionment made by the CIT(A) was unju....