ACIT Cir Satara, Satara V. Cooper Corporation P Ltd, Satara

ITA 1745/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72199 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 28-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S C SARANGI
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1745/PN/2012 (ASSESSMENT YEAR : 2007-08) ASST. COMMISSIONER OF INCOME TAX, SATARA CIRCLE, SATARA . APPELLANT VS. COOPER CORPORATION PVT. LTD., L-3, ADDL. MIDC, SATARA PAN : AAACC9687J . RESPONDENT DEPARTMENT BY : MR. S. C. SARANGI ASSESSEE BY : MR. C. H. NANIWADEKAR DATE OF HEARING : 24-09-2013 DATE OF PRONOUNCEMENT : 30-09-2013 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL HAS BEEN PREFERRED BY THE REV ENUE WHICH IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-III, PUNE DATED 30.06.2011 WHICH, IN TURN, HAS ARISEN FR OM AN ORDER DATED 04.12.2009 PASSED BY THE ASSESSING OFFICER, UNDER S ECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINI NG TO THE ASSESSMENT YEAR 2007-08. 2. IN THIS APPEAL, ALTHOUGH, THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE SOLITARY DISPUTE IS WITH REGARD TO T HE ACTION OF THE CIT(A) IN HOLDING THAT EXPENDITURE INCURRED TOWARDS ERECTION AND COMMISSIONING OF WINDMILL, IS ALSO ELIGIBLE FOR DEPRECIATION @ 80% A ND NOT @ 15%, AS CONTENDED BY THE ASSESSING OFFICER. 3. IN BRIEF, THE FACTS ARE THAT DURING THE YEAR UND ER CONSIDERATION, ASSESSEE HAD INSTALLED TWO WINDMILLS AT A TOTAL COS T OF RS.7,78,35,145/- AND ASSESSEE CLAIMED DEPRECIATION @ 80% ON THE ENTIRE C OST, WHICH AMOUNTED TO ITA NO.1745/PN/2012 A.Y. 2007-08 RS.6,22,68,196/-. THE ASSESSING OFFICER NOTICED THA T THE 80% RATE OF DEPRECIATION WAS ALLOWABLE ONLY ON THE COSTS ATTRIB UTABLE TO WINDMILL PER SE; AND, THUS ON THE TWO COMPONENTS OF EXPENDITURE ON ( I) FOUNDATION COST RS.30,00,000/-; AND, (II) ERECTION AND COMMISSIONIN G COST OF RS.30,00,000/-, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 10% AN D 15% RESPECTIVELY TREATING THEM AS ASSETS FALLING IN THE BLOCK OF AS SETS OF BUILDING AND PLANT & MACHINERY RESPECTIVELY. ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE CIT(A), WHO AGREED WITH THE PLEA OF THE ASSESSEE TH AT SO FAR AS THE EXPENDITURE ON ERECTION AND COMMISSIONING OF WINDMI LL IS CONCERNED, IT WAS ELIGIBLE FOR DEPRECIATION @ 80% WHEREAS WITH REGARD TO THE EXPENDITURE ON FOUNDATION OF WINDMILL, THE CIT(A) SUSTAINED THE AC TION OF THE ASSESSING OFFICER IN ALLOWING THE DEPRECIATION @ 10%. 4. IN THE ABOVE BACKGROUND, IN THE PRESENT APPEAL P REFERRED BY THE REVENUE, THE DISPUTE RELATES TO THE ORDER OF THE CI T(A) HOLDING THAT THE EXPENDITURE INCURRED ON ERECTION AND COMMISSIONING OF WINDMILL IS ENTITLED FOR DEPRECIATION @ 80%, CONSIDERING THE SAME TO BE AN I NTEGRAL PART OF THE COST OF WINDMILL. 5. BEFORE US, IT WAS A COMMON POINT BETWEEN THE PAR TIES THAT SIMILAR ISSUE HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUN AL IN THE CASE OF POONAWALLA FINVEST & AGRO PVT. LTD. VS. ACIT IN ITA NO.188/PN/2006 DATED 26.06.2008 AS WELL AS IN THE CASE OF DCIT VS. WESTE RN PRECICAST PVT. LTD. IN ITA NO.890/PN/2011 DATED 31.12.2012. FOLLOWING THE AFORESAID PRECEDENTS, IT IS TO BE UNDERSTOOD THAT THE ERECTION AND COMMISSIO NING COSTS CONSISTING OF LABOUR RELATED WORK FOR ERECTION AND INSTALLATION O F WINDMILL IS TO BE CONSIDERED AS AN INTEGRAL PART OF THE COST OF THE WINDMILL. OS TENSIBLY, SUCH COST IS INCURRED ON ACTIVITIES THAT BRING THE WINDMILL INTO EXISTENC E AND PUTS THEM IN WORKING CONDITION AT THE DESIRED LOCATION. THEREFORE, THE S AME ARE TO BE CONSIDERED AS AN INTEGRAL PART OF THE COST OF THE WINDMILLS AND T HE SAME IS ACCORDINGLY ELIGIBLE FOR DEPRECIATION @ 80%. CONSIDERING THE PR ECEDENTS ON THE SUBJECT, ITA NO.1745/PN/2012 A.Y. 2007-08 AND IN THE ABSENCE OF ANY DECISION TO THE CONTRARY BROUGHT TO OUR NOTICE, WE HEREBY AFFIRM THE DECISION OF THE CIT(A) IN ALLOWIN G THE DEPRECIATION AT HIGHER RATE OF 80% ON THE COST INCURRED FOR ERECTION AND C OMMISSIONING OF THE WINDMILLS. 6. BEFORE PARTING, WE MAY ALSO OBSERVE THAT IN PARA 5.1 OF THE IMPUGNED ORDER, THE CIT(A) HAS REFERRED TO THE DECISION OF H IS PREDECESSOR IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 WHE REIN SIMILAR ISSUE IS SAID TO HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE . AT THE TIME OF HEARING BEFORE US, THERE IS NO MATERIAL PUT-FORTH BY EITHER OF THE PARTIES TO SHOW THAT THE ORDER OF THE CIT(A) FOR THE PRECEDING ASSESSMENT YE AR 2006-07 IN ASSESSEES OWN CASE HAS BEEN ALTERED BY ANY HIGHER AUTHORITY W ITH RESPECT TO THE ISSUE UNDER CONSIDERATION. 7. THUS, WE HEREBY AFFIRM THE ORDER OF THE CIT(A) A S ABOVE, AND ACCORDINGLY REVENUE FAILS. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 30 TH SEPTEMBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR, B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE