2022 (6) TMI 743

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....ermined the total income of the assessee at a loss of Rs.11,88,92,509/- under the normal provisions of the Act and book profit u/s.115JB of the Act at Rs.4,19,53,31,478/-. The records of the said assessment came to be examined by the Pr.CIT and on such examination, he found that the order passed by the Assessing Officer u/s.143(3) of the Act on 26/12/2017 was erroneous and prejudicial to the interests of the revenue on account of the following: "On verification of records, it is seen that the CBDT vide Notification No.15/2012 [F.No.149/21/2010-SO (TPL)] S.O. 694(E), dated 30-3-2012, revised depreciation rate on Windmills by making amendment in the Table, in the New Appendix I of the Income Tax Rules, 1961. After change, restricted depreciation of 80 per cent was available on windmills installed on or before 31st day of March, 2012. The CBDT, thereafter, vide Notification No.43/2014 [F.NO.152/1/2013-TPL]/SO 2399(E), dated 16-9-2014, made amendment in the New Appendix I of IT Rules by inserting the words "installed on or after the 1st day of April, 2014" in place of "installed on or before 1st day of March, 2012". Thus, depreciation on windmills installed before 1 April 2014 is ava....

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....ten down value of Rs.123,84,392 for windmill is again incorrect as it refers to depreciation on block of assets of 'Renewable Energy Devices". (iv) When windmills were acquired by the Company in the F.Y. 2011-12, their value were added in the block of 'Renewable Energy Devices' as per the Scheme of Income tax Act, once an assets becomes part of block, it loses its identity and thereafter there is no provision, process or method to remove that asset or its value from the block for computing depreciation in subsequent years. (v) The amendment referred to in the notice makes windmills ineligible for entering this block of Renewable Energy Devices. We are in compliance with this amendment in as much as we have not acquired/or installed any windmill to this block after this amendment. In view of the above, there is no error in the Assessment Order. However, without prejudice to above, it is submitted that even assuming that there is some case for holding otherwise, considering that assessments are completed/returns are already filed for later years on the basis that depreciation at 80% is allowed as claimed, assessment in this year cannot be so revised as to make it inconsistent....

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....king engaged in generation or generation and distribution of power, therefore as per Section 32(1) of the Act, depreciation thereupon was required to be allowed at the prescribed rate of 15% and therefore, question of entering them (windmills) in block of assets should not have arisen. Notwithstanding to the above, even if the windmills were entered into certain 'block of assets', merely because depreciation was claimed/allowed in earlier years on these windmills at the rate of 80% on the ground that these fall within Block of Assets of 'Renewable Energy devices' cannot be a ground to allow the same at the rate of 80% in the year under consideration when the rate of depreciation was amended to 15% by the aforementioned notification of the CBDT. It is well settled that every year is an independent unit and merely because depreciation was allowed earlier by revenue at the then prescribed rate of 80% does not mean that the same will continued to be allowed at this rate in the year under consideration also inspite of the fact that the rate of depreciation on windmill was amended to 1% by the aforementioned notification f the CBDT. Allowing depreciation under section 32 on these win....

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.... the windmills installed between 01/04/2012 to 31/03/2014 thus were not entitled for higher depreciation @80% but the windmills installed on or before 31st day of March-2012 continued to be eligible for depreciation @80% even for the Assessment Years 2013-14 and onwards as rightly claimed by the assessee and allowed by the Assessing Officer in the assessment completed u/s.143(3) of the Act. He contended that the conclusion arrived at by the Ld. Pr.CIT in his impugned order that depreciation on all the windmills installed before 1st April-2014 were eligible for depreciation only @15% based on the amendment made in the depreciation table given in Appendix-I of the Income Tax Rules, 1962 thus is not correct and it was only the windmills installed during the period from 01/04/2012 to 31/03/2014 that were eligible for normal depreciation @ 15% and not at the higher rate of 80%. He contended that all the windmills on which higher depreciation @ 80% was claimed by the assessee had been installed on or before 31st day of March-2012 and the same were thus continued to be eligible for depreciation @80%. He also contended that the said windmills installed on or before 31/03/2012 had already e....