TaxTMI 
TaxTMI 
2021 (5) TMI 76
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....from acquired and installed and the condition prescribed in New Appendix is only 'installed". In view of the above grounds and such other additional grounds as may be adduced at time of hearing, it is prayed before the Hon'ble Income Tax Appellate Tribunal to, a) reverse the order of Hon'ble CIT(A) denying the benefit of higher depreciation on windmill installed prior to 0I.04.2012. b) give directions to the learned Assessing Officer to allow the depreciation on such windmill at the rate of 80%, and; c) pass such other consequential order as the Hon'bIe Income tax Appellate Tribunal may deem fit to render justice." 3. Brief facts of the case are that the assessee company is engaged in the business of manufacturing power and energy filed its return of income for the assessment year 2015-16 on 28.09.2015 declaring loss of Rs. 4,53,11,195/- under the normal provisions and book profit of Rs. 1,56,45,624/- u/s.115JB of the Income Tax Act, 1961. During the year under consideration, the assessee has purchased used windmills installed on or before 31.03.2012 and claimed depreciation @ 80%, as per pre-amended Appendix-I. During the course of assessment....
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.... (i.e) pre installed with mills are not covered by the Notification is not in consonance with the rules regarding interpretation of statues. By this interpretation, discrimination will be created between class of assesses, which is not the intention of any legislative enactment. i.e. assessees who have purchased pre-installed wind mills during the material year, will be eligible for 80% and those who purchase new Wind mills are eligible for lesser rate @ 15%. In fact, the second hand windmills are purchased at enhanced cost, though W.D.V. for the previous owner is far less figure due to accelerated depreciation. So, giving depreciation on such wind mills (c) 8o% because it is pre-installed is not in consonance with the legislative intent and there will he discrimination between same class of assessees' i.e. assessees who have newly purchased and installed WTGs and assesses who have purchased second hand WTGs(not requiring installation as it is pre installed), In fact the legislative purpose will not be served by the latter category who continue to benefit from accelerated depreciation on those assets whose WDVs before the sale would be much less if depreciation is given at 80% even....
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....ciation at 15%. As such penalty proceeding u/s.271(1)(c) is initiated separately." 4. Being aggrieved by the assessment order, the assessee preferred an appeal before learned CIT(A). Before the learned CIT(A), the assessee has submitted that windmill purchased and installed on or before 31.3.2012 are eligible for 80% depreciation as per Notification No.15/2012 dated 30th March, 2012, where the CBDT has clarified that windmills and any specially designed devices which run on windmill installed on or before 31.3.2012 are eligible for 80% depreciation. The learned CIT(A), after considering relevant submissions of the assessee rejected the claim by holding that one of the basic conditions for claim of depreciation on any asset is its ownership. Since the assessee became owner of the asset only after 31.3.2012, whether or not the asset is a new asset or used asset, depreciation should be provided as per rate applicable from the date the assessee became owner of the asset. Since the assessee purchased asset on or after 01.04.2012, as per amended provisions windmills are entitled for depreciation @ 15%. Therefore, conclusion drawn by the Assessing Officer that the assessee has made wro....
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....e eligible for depreciation @ 80%. This was further clarified by CBDT vide its Notification No.15/2012 dated 30.03.2012, as per which, windmills installed on or before 31.03.2012 are eligible for 80% depreciation. The Assessing Officer has disallowed depreciation claimed by the assessee on the ground that windmills purchased and installed on or after 01.04.2012 are eligible for 15% depreciation, as per amended Appendix-I of Rule 5 of Income Tax Rules,1962. According to her, ownership is essential for claiming depreciation on any asset and hence, if the assessee became owner after 01.04.2012, irrespective of the fact that any asset is installed on or before 31.03.2012, depreciation shall be applicable as per amended provisions of the Act. Therefore, she opined that rate of depreciation applied by the assessee on windmills is incorrect and hence, disallowed excess depreciation over and above 15% claimed on windmills. 8. We have given our thoughtful consideration to the reasons given by the Assessing Officer for disallowance of depreciation over and above 15% on windmills and find no merits, because the Act specifically states that windmills installed on or before 31.03.2012 are el....