T.R.Subramaniam, CHENNAI V. ACIT, Tiruppur

ITA 63/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8624 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL B SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.63/MDS/2015 # $%# / ASSESSMENT YEAR : 2005-06 SHRI T.R. SUBRAMANIAM, C/O SHRI S. SRIDHAR, ADVOCATE, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : ASUPS 2395 E V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, TIRUPUR. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE )*'( + , / RESPONDENT BY : SHRI SUPRIYO PAL, JCIT - $ + ./ / DATE OF HEARING : 20.06.2016 01% + ./ / DATE OF PRONOUNCEMENT : 18.08.2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) II, COIM BATORE, DATED 28.10.2014 AND PERTAINS TO ASSESSMENT YEAR 2005-06. 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WIT H REGARD TO 2 I.T.A. NO.63/MDS/15 DISALLOWANCE OF DEPRECIATION TO THE EXTENT OF ` 42,82,431/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE CLAIMED DEPRECIATION ON THE WINDMILL. HOWEVER, THE ASSESSING OFFICER DISAL LOWED THE CLAIM OF THE ASSESSEE THAT THOUGH THE WINDMILL WAS READY TO USE TILL 06.10.2005, THE SAME WAS ACTUALLY USED ON 06.10.200 5. THE WINDMILL READY FOR OPERATION ON 31.03.2005. THE AC TUAL COMMENCEMENT OF GENERATION OF ELECTRICITY IS FROM 0 6.10.2005, THEREFORE, THE ASSESSEE IS ELIGIBLE FOR DEPRECIATIO N ONLY FROM 31.03.2005. ACCORDING TO THE LD. COUNSEL, SINCE TH E WINDMILL WAS READY EVEN BEFORE APRIL, 2005, THE ASSESSING OFFICE R IS NOT JUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE. 3. ON THE CONTRARY, SHRI SUPRIYO PAL, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R EXAMINED THE ASSISTANT EXECUTIVE ENGINEER AND FOUND THAT THE WIN DMILL WAS PUT TO USE ONLY ON 06.10.2005. ACCORDING TO THE LD. D.R., IF THE MACHINERY WAS ACTUALLY PUT TO USE IN MARCH, 2005 AS CLAIMED B Y THE ASSESSEE, THERE WAS NO REASON FOR POSTPONING THE BILLING AND GRID CONNECTION TILL OCTOBER, 2005. THEREFORE, ACCORDING TO THE LD . D.R., IT IS OBVIOUS THAT THE ASSESSEE GENERATED ELECTRICITY ONLY FROM 0 6.10.2005 AND THE FIRST BILL WAS GENERATED FROM 10.10.2005. THER EFORE, ACCORDING 3 I.T.A. NO.63/MDS/15 TO THE LD. D.R., THE CIT(APPEALS) HAS RIGHTLY CONFI RMED THE DISALLOWANCE OF DEPRECIATION MADE BY THE ASSESSING OFFICER. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS THAT THE WI NDMILL COMMENCED ITS OPERATION ON 31.03.2005. THE CIT(APPEALS) HAS REPRODUCED THE DETAILS OF THE EVENTS AND FOUND THAT FOR THE PERIOD FROM 31.03.2005 TO 10.04.2005, THE ASSESSEE HAS IMPORTED 36 UNITS A ND EXPORTED 56 UNITS OF ELECTRICITY. THIS WAS AGAIN DISCONNECTED ON 10.04.2005 DUE TO NON-AVAILABILITY OF GRID UPTO THE STAGE OF THE W INDMILL GENERATOR. THE FACT REMAINS THAT THE ASSESSEE HAS INSTALLED TH E MACHINERY, NAMELY, WINDMILL AND COMMENCED ITS OPERATION ON 31. 03.2005. THE COMMERCIAL OPERATION WAS IN FACT STARTED ONLY ON 06 .10.2005. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSES SEE INSTALLED THE WINDMILL AND COMMENCED ITS OPERATION, MERELY BECAUS E THE COMMERCIAL OPERATION WAS POSTPONED TILL 06.10.2005 FOR WANT OF GRID AND TRANSMISSION OF ELECTRICITY GENERATED, WHETHER THE ASSESSEE IS NOT ENTITLED FOR DEPRECIATION? THE FACT THAT THE A SSESSEE COMMISSIONED THE WINDMILL ON 31.03.2005 IS NOT IN D ISPUTE. THE COMMERCIAL GENERATION OF ELECTRICITY WAS POSTPONED TO 06.10.2005 FOR WANT OF GRID AND TRANSMISSION OF ELECTRICITY. THIS FACT CANNOT BE 4 I.T.A. NO.63/MDS/15 AGAINST THE ASSESSEE FOR DISALLOWING THE DEPRECIATI ON. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MERELY BECAUSE TH E GRID WAS NOT AVAILABLE TO TRANSMIT THE ELECTRICITY THAT WOULD BE GENERATED BY THE ASSESSEES UNIT, THE DISALLOWANCE MADE BY THE ASSES SING OFFICER WITH REGARD TO DEPRECIATION IS NOT JUSTIFIED. THE ASSESSEE INSTALLED THE WINDMILL AND COMMISSIONED THE SAME ON 31.03.200 5 AND IN FACT, IMPORTED 36 UNITS AND EXPORTED 56 UNITS OF ELECTRIC ITY. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEPRECIATION. IN VIEW OF THIS, THIS T RIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW AND ACCO RDINGLY, THE SAME ARE SET ASIDE. THE ASSESSING OFFICER IS DIREC TED TO ALLOW THE DEPRECIATION. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 18 TH AUGUST, 2016 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 3! /DATED, THE 18 TH AUGUST, 2016. KRI. 5 I.T.A. NO.63/MDS/15 + ).45 65%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 7. () /CIT(A)-II, COIMBATORE 4. - 7. /CIT-III, COIMBATORE 5. 5$8 ). /DR 6. 9# : /GF.