R.Ramanathan, Karur V. DCIT, Trichy

ITA 350/CHNY/2010

• Counselvise Citation: 35021714 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 23-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RENGARAJAN JR STAND ING
• Keywords: Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI B E F O R E DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.350(MDS)/2010 ASSESSMENT YEAR: 2006-07 SHRI R.RAMANATHAN, PROP. VENGARAIAMMAN YARN AGENCY, 105, VAIYAPURI NGR. 1 ST CROSS, KARUR. PAN AAGPR7903K. VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE II, TIRUCHIRAPALLI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI QUADIR HOSEYN RESPONDENT BY: SHRI KEB RENGARAJAN, JR.STAND ING COUNSEL. DATE OF HEARING : 11 TH AUGUST, 2011 DATE OF PRONOUNCEMENT : 11 TH AUGUST, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE - - ITA NO.350 OF 2010 2 ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) AT TIRUCHIRAPALLI DATED 25-1-2010 AND ARISES OUT OF TH E ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX AC T, 1961. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX(APPEA LS) HAS ERRED IN CONFIRMING THE RATE OF 10% DEPRECIATION ON CIVIL AND ELECTRICAL COMPONENTS OF THE WINDMILL AS AGAINST TH E RATE OF 80% APPLICABLE TO THE WINDMILL AS A WHOLE. 3. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. KARNATAKA POWER CORPORATION, 247 ITR 268, H AS HELD THAT WHETHER A BUILDING COULD BE TREATED AS A PLANT WAS A QUESTION OF FACT AND WHEN IT WAS FOUND AS A FACT TH AT THE BUILDING HAS BEEN SO PLANNED AND CONSTRUCTED SO AS TO SERVE THE SPECIAL TECHNICAL REQUIREMENT OF THE ASSESSEE, THE BUILDING WILL QUALIFY TO BE TREATED AS PLANT. 4. THE INCOME-TAX APPELLATE TRIBUNAL, A-BENCH, CHENNAI IN THE CASE OF M/S. ASIAN HANDLOOM VS. DCIT IN ITA - - ITA NO.350 OF 2010 3 NO.2291(MDS)/2008 THROUGH THEIR ORDER DATED 20-11-2 009 HAS CONSIDERED EXACTLY A SIMILAR ISSUE IN THE LIGHT OF THE PROPOSITIONS LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN TH E ABOVE MENTIONED CASE. THE TRIBUNAL FOUND THAT WINDMILLS A RE FABRICATED/ERECTED ON A SPECIALIZED FOUNDATION AND THE CIVIL AND ELECTRICAL COMPONENTS OF THE STRUCTURE ARE INDIVISI BLE PARTS OF THE WINDMILL PLANT AS A WHOLE. IN THE LIGHT OF THE ABO VE ORDER OF THE COORDINATE BENCH, WE FIND THAT THE CIVIL AND ELECTR ICAL COMPONENTS OF THE WINDMILL STRUCTURE CANNOT BE DISA SSOCIATED FROM THE SOLE AND SUBSTANCE OF THE WINDMILL AND CAN NOT BE GIVEN A SEPARATE TREATMENT FOR DEPRECIATION AS IF THOSE I TEMS ARE INDEPENDENT SUPPORTING SYSTEM OF A WINDMILL. THERE FORE, IN THE LIGHT OF THE DECISION OF THE COORDINATE BENCH, WE H OLD THAT THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN RESTRICTING THE DEPRECIATION TO 10% OF THE COST OF CIVIL AND ELECTRICAL COMPONENTS OF THE WINDMILL. THE ASSESSING AUTHORITY IS DIRECTED TO GRANT DEPREC IATION AT 80% ON THE WHOLE COST OF THE WINDMILL INCLUDING CIVIL A ND ELECTRICAL COMPONENTS. - - ITA NO.350 OF 2010 4 5. IN RESULT THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON THURSDAY, THE 11 TH DAY OF AUGUST, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 11 TH AUGUST, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.