DCIT, Cir.-1, Sangli V. Western Precicast Pvt. Ltd., Sangli

ITA 890/PUN/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0874 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-11-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: M P MACHAWE
• Keywords: Depreciation; Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , AM . / ITA NO. 814 /PN/201 1 / ASSESSMENT YEAR : 200 7 - 0 8 M/S. WESTERN PRECICAST PVT. LTD., GAT NO.170, NEAR KUPWAD MIDC, SAVALI VILLAGE, TAL. MIRAJ, SANGLI . / APPELLANT PAN: AA ACW3853C VS. THE JT . COMMISSIONER OF INCOME TAX, RANGE 2 , SANGLI . / RESPONDENT . / ITA NO. 890 /PN/201 1 / ASSESSMENT YEAR : 200 7 - 0 8 THE JT. COMMISSIONER OF INCOME TAX, THE JT. COMMISSIONER OF INCOME TAX, RANGE 2, SANGLI . / APPELLANT VS. M/S. WESTERN PRECICAST PVT. LTD., GAT NO.170, NEAR KUPWAD MIDC, SAVALI VILLAGE, TAL. MIRAJ, SANGLI . / RESPONDENT PAN: AA ACW3853C . / ITA NO. 1495 /PN/201 1 / ASSESSMENT YEAR : 200 8 - 0 9 M/S. WESTERN PRECICAST PVT. LTD., GAT NO.170, NEAR KUPWAD MIDC, SAVALI VILLAGE, TAL. MIRAJ, SANGLI . / APPELLANT PAN: AA ACW3853C VS. THE JT. COMMISSIONER OF INCOME TAX, RANGE 2, SANGLI . / RESPONDENT 2 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 . / ITA NO. 2484 /PN/201 2 / ASSESSMENT YEAR : 200 9 - 1 0 M/S. WESTERN PRECICAST PVT. LTD., GAT NO.170, NEAR KUPWAD MIDC, SAVALI VILLAGE, TAL. MIRAJ, SANGLI . / APPELLANT PAN: AA ACW3853C VS. THE DY . COMMISSIONER OF INCOME TAX, CIRCLE 2, SANGLI . / RESPONDENT ASSESSEE BY : SHRI M.P. MACHAWE DEPARTMENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 0 7 .0 9 .2015 / DATE OF PRONOUNCEMENT: 09 . 1 1 .2015 / ORDER / ORDER PER SUSHMA CHOWLA, JM : OUT OF THIS BUNCH OF FOUR APPEALS , CROSS - APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE AGAINST THE ORDER OF CIT(A), KOLHAPUR , DATED 31 . 12 .201 0 RELATING TO ASSESSMENT YEAR 20 0 7 - 0 8 PASSED AGAINST ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) . FURTHER, THE ASSESSEE IS ALSO IN APPEAL AGAINST SEPARATE ORDERS OF CIT(A), KOLHAPUR, DATED 28.06.2010 AND 19.04.2011 RESPECTIVELY, RELATING TO ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 PASSED AGAINST RESPECTIVE ORDERS UNDER SECTION 143(3) OF THE ACT. 2. THE APPEAL IN ITA NO.814/PN/2011 WAS EARLIER HEARD EXPARTE, WHICH IN TURN WAS RECALLED VIDE ORDER PASSED BY THE TRIBUNAL IN MA NO.62/PN/2014, DATED 13.06.2014 . THE APPEAL OF THE REVENUE IN ITA NO.890/PN/2011 WAS ALSO 3 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 ADJUDICATED BY THE TRIBUNAL VIDE ORDER DATED 31.12.2012 . HOWEVER, THE ASSESSEE MOVED MISCELLANEOUS APPLICATION BEFORE THE TRIBUNAL PRESSING THAT THE APPEAL OF THE ASSESSEE AND THE APPEAL OF REVENUE ARE TO BE HEARD TOGETHER, SINCE THE ISSUE INVOLVED IN BOTH THE APPEALS W AS SAME. THE TRIBUNAL NOTED THE FACT THAT THE APPEAL OF THE ASSESSEE HAS BEEN RECALLED AND THE APPEAL OF THE REVENUE ARISING FROM THE SAME ORDER OF CIT(A) WAS ALSO RECALLED BY THE TRIBUNAL VIDE ORDER DATED 22.07.2015 VIDE MA NO.93/PN/2014 AND CONSEQUENTLY , CROSS APPEALS WERE FIXED FOR HEARING BEFORE US. 3. THE ASSESSEE IN ITA NO S. 1495/PN2011 AND 2484/PN/2012 IS ALSO AGGRIEVED ON SIMILAR ISSUE OF NON - GRANT OF DEPRECIATION ON WINDMILL AS RAISED IN ASSESSMENT YEAR 2007 - 08. HENCE, ALL THE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. REFERENCE IS BEING TO THE FACTS AND ISSUE IN ITA NO.814/PN/2011 TO ADJUDICATE THE ISSUES. 4 . FIRST, WE SHALL TAKE UP CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE VIDE ITA NOS.814/PN/ 2011 AND 890/PN/2011. 5. THE ASSESSEE IN ITA NO. 814 /PN/201 1 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1) IN THE VIEW OF FACTS & CIRCUMSTANCES, THE HON. COMMISSIONER OF INCOME TAX, (APPEALS) HAS ERRED BOTH ON FACTS AS WELL AS IN LAW IN NOT DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION OF RS.8,95,265 (55,64,410 - (2114330+2554815 ) ON WIND MILLS, AND HENCE THE ADDITION MAY BE CANCELLED. 2) ALTHOUGH THE DEPRECIATION ON THE WINDMILL WAS ALLOWED FOR THE SECOND HALF YEAR IN A.Y.2006 - 07 @ 80% AND NO FACTS AND CIRCUMSTANCES HAD CHANGED, THE CLAIM OF DEPRECIATION @ 80% IS WRONGLY REJECTED BY THE ASSESSING AUTHORITY AND DEPRECIATION LESSER THAN 80% IS ALLOWED ON THAT MACHINERY FOR A.Y.2007 - 08, HENCE THE ADDITION MAY BE CANCELLED. 3) IN THE VIEW OF FACTS & CIRCUMSTANCES, THE HON. COMMISSIONER OF INCOME TAX, (APPEALS) ERRED IN BIFURCATING THE COST OF WINDMILL AND TREATING COST OF RS.1917969 (WINDMILL I ) AND RS.467100 (WINDMILL II) AS BUILDING AND HENCE THE SAME SHOULD BE TREATED AS COST OF WINDMILL. 4 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 4) IN THE VIEW OF FACTS & CIRCUMSTANCES, THE HON. COMMISSIONER OF INCOME TAX, (APPEALS) ERRED IN TREATING POWER EVACUATION EXPENSES OF RS.37,50,000 (WDV 22,50,000) AS NORMAL MACHINERY W ITH DEPRECIATION RATE @ 15% AND NOT AS A PART OF COST OF WINDMILL. HENCE, THIS EXPENSES TO BE TREATED AS PART AND PARCEL COST OF WINDMILL. 5) IN THE VIEW OF FACTS & CIRCUMSTANCES, THE HON. COMMISSIONER OF INCOME TAX, (APPEALS) ERRED IN BIFURCATING COST O F MEDA AND OTHER PROCESSING CHARGES, INTO WINDMILL COST WITH ELIGIBLE DEPRECIATION RATE OF 80% AND BUILDING COST WITH ELIGIBLE DEPRECIATION RATE AT 10%, AND HENCE THE SAME SHOULD BE TREATED AS COST OF WINDMILL. 6) YOUR PETITIONER PRAYS LEAVE TO ADD, ALTER, AMEND, WITHDRAW AND CLARIFY THE GROUNDS OF APPEAL AS AND WHEN OCCASION DEMANDS. 7) YOUR PETITIONER PRAYS LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE HIS CASE AS OCCASION MAY DEMAND. 6 . THE REVENUE IN ITA NO. 890 /PN/201 1 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE CIT[A] ERRED IN CLASSIFYING COMPONENTS & ACCESSORIES OF RENEWABLE ENERGY DEVICES (1 / 3RD OF THE TOTAL COST), ELECTRICAL ITEMS, COMPONENTS OF RENEWABLE ENE RGY PROJECT DEVICE / WINDMILL, IN RESPECT OF WIND FARM PROJECT DEVICE / WINDMILL, IN RESPECT OF WIND FARM PROJECT CONSISTING OF ONE WTG 0.60 M W WINDMILL AT LOCATION NO.GP - 31, INSTAL L ATION (WITH MATERIAL) OF ELECTRICAL LINE FOR POWER TRANSMISSION AND METERING IN RESPECT OF WIND FARM PROJECT CONSISTING OF ONE WTG FOR YOUR 0.60 MW WIND MILL OR SPECIFICALLY DESIGNED DEVICES WHICH RUN ON WIND MILLS AND AS SUCH AT LOCATION NO.G P - 31, AS INTEGRAL PART OF WIND MILL WHEN THESE ITEMS ARE NOT WIND MILL OR SPECIFICALLY DESIGNED DEVICES WHICH RUN ON MILL WIND MILLS AND AS SUCH S A I D ITEMS WOULD NOT CLASSIFY FOR DEPRECIATION @ 80% AS PER THE DEPREC I A TI ON SCHEDULE. 2. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE CIT[A] ERRED OBSERVING THAT LABOUR WORK RELATED TO INS TALLATION OF ONE WIND TURBINE GENERATOR FOR RS.10,55,056/ - WAS REQUIRED TO BE INCLUDED IN THE COST OF WIND TURBINE GENERATOR FOR ALLOWANCE OF DEPRECIATION @ 80% WHEN THE SAID EXPENSES WAS REQUIRED TO BE SPREAD OVER IN THE PRO PORTION OF COST OF C I V I L WORK, COST OF W IN D MILL AND COST OF PLANT & MACHINERY AND THE DEPRECIATION WAS TO BE ALLOWED AS APPLICABLE RATES. 3. ON THE FACTS AND IN T HE CIRCUMSTA NCES OF THE CASE AND IN LAW, THE CIT[A] ERRED IN APPLYING THE DECISI O N OF THE ITA T , PUNE BENCH IN THE CASE OF POONAWALA FINVEST AND AGR O PVT. L T D . (118 TTJ 68) AS THE DECISION IS DISTINGUISHABLE ON FACTS AND DOES NOT CONSIDERED THE RATE SCHEDULE OF DEPRECIATION U/S 32C WHICH PROVIDES FOR DEPRECIATION @ 80% ONLY ON WIND MILLS AND DEVICES SPECIALLY DESIGNED TO RUN ON WIND MILLS. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT[A] ERRED IN ALLOWING DEPRECIATION @ 80% ON PROPOR TIONATE COST IN MEDA CHARGES OF RS.6,28,750 / - AS THE SAME DOES NOT FORM PART OF COST OF WINDMILL OR ANY SPECIFICALLY DEVICE TO RUN ON WINDMILL. 5 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 7. B RIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURE O F STEEL AND ALLOY STEEL CASTING AND WAS ALSO GENERATING ELECTRICITY THROUGH WINDMILL. DURING THE ASSESSMENT YEAR 2006 - 07, THE ASSESSEE HAD PURCHASED A WINDMILL FOR RS. 6,15,95,636/ - AND SINCE THE SAID WINDMILL WAS INSTALLED ON 29.03.2006 , THE ASSESSEE CLAI MED DEPRECIATION @ 80% FOR HALF YEAR AND THE BALANCE WDV WAS CARRIED FORWARD AT RS.3,69,57,382/ - , WHICH WAS OPENING WDV FOR THE INSTANT ASSESSMENT YEAR UNDER APPEAL. FURTHER, THE ASSESSEE HAD PURCHASED ONE WINDMILL OF RS.90 LAKHS F ROM M/S. SOUTHERN WIND F ARM LTD., DURING THE YEAR UNDER CONSIDERATION AND HAD PUT THE SAME FOR USE ON 24.02.2007 . THE DEPRECIATION WAS CHARGED @ 80% FOR HALF YEAR. THE COMMISSIONING CERTIFICATE WAS ISSUED BY THE PRESCRIBED AUTHORITIES. THE ASSESSING OFFICER DURING THE COURSE O F ASSESSMENT PROCEEDINGS ASKED THE ASSESSEE COMPANY TO FURNISH THE DETAILS OF INSTALLATION OF SUCH WINDMILLS ALONG WITH COPIES OF INVOICES ISSUED BY M/S. SUZLON ENERGY LIMITED & SUZLON INFRASTRUCTURE LIMITED RELEVANT TO ASSESSMENT YEAR 2006 - 07 AND M/S. SOUTHERN WIND FARMS LTD. RELEVANT TO ASSESSMENT YEAR 2007 - 08 . ON PERUSAL OF THE DOCUMENTS FILED, THE ASSESSING OFFICER NOTED THAT IN RESPECT OF WINDMILL INSTALLED IN ASSESSMENT YEAR 2006 - 07, THE ASSESSEE HAD RECEIVED SEPARATE BILLS I.E. ONE BILL ON ACCOUN T OF COST OF WINDMILL, ONE BILL FOR INSTALLATION AND OTHER BILLS FOR ERECTION AND INSTALLATION OF WINDMILL AND ITS CIVIL CONSTRUCTION WORK. HOWEVER, IN RESPECT OF BILL FOR ASSESSMENT YEAR 2007 - 08 , A COMPOSITE BILL OF RS.90 LAKHS WAS RECEIVED BY THE ASSESS EE. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF VARIOUS EXPENSES INCURRED FOR ACQUIRING THE WINDMILL FOR BOTH THE ASSESSMENT YEARS. IN REPLY, THE ASSESSEE SUBMITTED THAT THERE IS NO MERIT IN SEGREGATION OF WINDMILL COST INTO COST OF WINDMILL, COST ON CIVIL WORK CONSISTING OF FOUNDATION / WORK FOR TRANSFORMER AND PLINTH AND COST OF ERECTION AND COMMISSIONING OF THE WINDMILL. AS PER THE ASSESSEE, THE WINDMILL CONSISTED OF GENERATOR, THE FINS, THE ELECTRICAL CABLES, AND OTHER MECHANICAL PARTS, ST AND ON WHICH THE GENERATOR IS TO BE INSTALLED, AND 6 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 NECESSARY CIVIL WORK FOR HOLDING THE STAND. ALL THESE WERE PART AND PARCEL OF THE WINDMILL AND IT COULD NOT COME INTO EXISTENCE W ITHOUT THESE THINGS AND THEREFORE, THESE PARTS WERE INDISPENSABLE FOR ITS E XISTENCE AND THERE IS NO MERIT IN THE DIVISION OF COST INTO VARIOUS HEADS AS PROPOSED BY THE ASSESSING OFFICER. IT WAS FURTHER POINTED OUT THAT THE SUPPLIER IN ASSESSMENT YEAR 2007 - 08 HAD CHARGED CONSOLIDATED PRICE OF RS.90 LAKHS WITHOUT GIVING ANY BREAK - UP AND THEREAFTER, NO DIVISION OF COST ON ANY ASSUMPTION SHOULD BE MADE. THE ASSESSING OFFICER REJECTING THE SUBMISSIONS OF ASSESSEE NOTED THAT FROM THE DETAILS FILED RELATING TO ASSESSMENT YEAR 2006 - 07, THE EXPENDITURE COULD BE BIFURCATED INTO THE COST O F WIND TURBINE AND EXPENDITURE ON FOUNDATION AND CIVIL WORK AND ALSO ERECTION AND COMMISSIONING WORK. IN VIEW OF SEPARATE BILLS RECEIVED BY THE ASSESSEE IN THE PRECEDING YEAR, THE ASSESSING OFFICER BIFURCATED THE TOTAL EXPENDITURE AND WAS OF THE VIEW THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEPRECIATION @ 80% ONLY ON THE COST OF WINDMILL , IN R ESPECT OF PLANT & MACHINERY , THE ASSESSEE WAS ENTITLED TO DEPRECIATION @ 15% AND FOUNDATION WORK WHICH CONSTITUTED MAJOR PORTION OF THE EXPENDITURE WAS TO BE CONSIDERED UNDER THE BLOCK OF BUILDING , ON WHICH DEPRECIATION WAS TO BE ALLOWED @ 10% . THE ASSESSING OFFICER THUS, RE - COMPUTED THE DEPRECIATION TO BE ALLOWED TO THE ASSESSEE IN RESPECT OF WIND TURBINE GENERATOR NO.1 PURCHASED IN ASSESSMENT YEAR 2006 - 07 AN D WIND TURBINE GENERATOR NO.2 PURCHASED IN ASSESSMENT YEAR 2007 - 08 . THE ASSESSING OFFICER ALLOWED DEPRECIATION OF RS. 2,46,05,486/ - IN RESPECT OF WIND TURBINE GENERATOR NO.1 AND IN RESPECT OF WIND TURBINE GENERATOR NO.2, THE ASSESSING OFFICER ALLOWED DEPRE CIATION OF RS.29,96,010/ - I.E. TOTAL OF RS.2,76,01,496/ - AS AGAINST THE CLAIM OF DEPRECIATION BY THE ASSESSING OFFICER AT RS. 3,31,65,906/ - . THE EXCESS DEPRECIATION CLAIMED BY THE ASSESSEE AT RS.55,64,410/ - WAS ADDED BACK TO THE INCOME OF THE ASSESSEE. 7 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 8. IN APPEAL, THE CIT(A) UPHELD THE BIFURCATION OF COST OF WINDMILL AND THE RATE APPLIED BY THE ASSESSING OFFICER. HE FURTHER UPHELD THE ORDER OF ASSESSING OFFICER IN RESTRICTING THE D EPRECIATION O N CIVIL WORK @ 10%. HOWEVER, WITH REGARD TO THE DEPRECIATION ON THE COMPONENT OF COST RELATING TO ERECTION AND COMMISSIONING OF WINDMILLS, THE CIT(A) ALLOWED PARTIAL RELIEF OF RS. 25,54,815/ - RELATING TO BOTH WINDMILLS , ON SUCH RELIEF, THE REVENUE IS IN APPEAL BEFORE US. THE ASSESSEE IS IN APPEAL ON TWO ACCOUNTS I.E. IN RESPECT OF THE WINDMILL INSTALLED IN ASSESSMENT YEAR 2006 - 07, THE ASSESSEE IS ENTITLED TO THE BALANCE CLAIM OF DEPRECIATION @ 80% ON THE WDV. THE ASSESSEE IS FURTHER AGGRIEVED BY THE ORDER OF CIT(A) IN BIFURCATING THE COST OF BOTH WINDMI LL S AND TREATING PART OF IT AS COST OF BUILDING. FURTHER, THE ASSESSEE IS AGGRIEVED BY THE BIFURCATION OF THE CIT(A) UNDER THE HEAD PLANT & MACHINERY AND DISALLOWANCE OF COST OF MEDA AND OTHER PROCESSING CHARGES BEING ELIGIBLE FOR DEPRECIATION @ 10%. T HE APPEALS FILED BY THE ASSESSEE AND THE REVENUE WERE HEARD TOGETHER. 9. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE WDV OF THE ASSETS COULD NOT BE DISTURBED AND THE RULE OF CONSISTENCY HAD TO BE APPLIED. IN RESPECT OF ADD ITION OF RS.90 LAKHS, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DREW OUR ATTENTION TO THE COPY OF BILL PLACED AT PAGE 29 OF THE PAPER BOOK AND POINTED OUT THAT THE SAME WAS A CONSOLIDATED BILL ISSUED BY THE SUPPLIER. HE FURTHER ARGUED THAT TH E ASSESSING OFFICER HAD BIFURCATED THE FIGURES BY COMPARING THE SAME WITH THE BILL OF BIGGER WINDMILL INSTALLED IN THE PRECEDING YEAR, WHERE SEPARATE BILLS WERE GIVEN BY THE SUPPLIER. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT THERE WAS NO MERIT IN THE SAID BIFURCATION ON COST OF WINDMILL. 10. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT IN CASE THERE WAS AN ERROR IN THE EARLIER YEARS, THE SAME COULD NOT BE ALLOWED TO 8 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 CONTINUE IN THE SUCCEEDING YEAR. IT WAS FURTHER POINTED OUT THAT THE FACT COULD BE CONSIDERED AS HELD BY THE HONBLE MADRAS HIGH COURT IN ACE INVESTMENTS (P.) LTD. VS. CIT (2000) 244 ITR 166 (MAD) . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT THE DEP ARTMENT WAS AGGRIEVE D BY THE ORDER OF CIT(A) IN ALLOWING 80% DEPRECIATION ON ELECTRICAL ITEMS, ON WHICH DEPRECIATION WAS TO BE ALLOWED ONLY TO THE EXTENT OF 15%. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ISSUE ARISING IN T HE PRESENT APPEAL IS IN RESPECT OF RATE OF DEPRECIATION TO BE APPLIED ON WDV OF WINDMILL INSTALLED BY THE ASSESSEE IN ASSESSMENT YEAR 2006 - 07. ADMITTEDLY, THE FIRST MAJOR WINDMILL WAS INSTALLED BY THE ASSESSEE IN THE PRECEDING YEAR, IN WHICH THE COST OF W INDMILL WAS RS.6.15 CRORES. THE ASSESSING OFFICER IN AN ORDER PASSED UNDER SECTION 143(3) OF THE ACT, DATED 24.03.2008, COPY OF WHICH IS PLACED AT PAGES 15 AND 16 OF THE PAPER BOOK HAD ALLOWED THE CLAIM OF ASSESSEE AFTER OBTAINING THE EVIDENCE FOR MAJOR ITEMS OF EXPENDITURE CLAIMED AND ALSO ADDITION TO THE FIXED ASSETS ALONG WITH OTHER DETAILS. SINCE THE SAID WINDMILL WAS INSTALLED ON 29.03.2006, THE ASSESSEE CLAIMED DEPRECIATION @ 80% FOR HALF OF THE YEAR, WHICH WA S ALLOWED IN THE HANDS OF ASSESSEE. DURING THE YEAR UNDER CONSIDERATION I.E. IN THE NEXT SUCCEEDING YEAR, THE ASSESSEE HAD CLAIMED DEPRECIATION @ 80% ON WDV OF WINDMILL, WHICH WAS INSTALLED ON 29.03.2006. THE FIRST ISSUE WHICH HAS TO BE ADDRESSED IS WHET HER WHILE COMPLETING THE ASSESSMENT IN SUCCEEDING YEAR , IS THE ASSESSING OFFICER AUTHORIZED OR EMPOWERED TO DISTURB THE WDV OF AN ASSET, WHICH IS BROUGHT FORWARD FROM THE PRECEDING YEAR. ADMITTEDLY, SUCH AN ASSET WAS INSTALLED IN EARLIER YEAR, ON WHICH VA LUE OF DEPRECIATION WAS CLAIMED BY THE ASSESSEE, WHICH IN TURN HAS BEEN ALLOWED BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT IN THE PRECEDING YEAR. THE ASSESSING OFFICER IS NOT EMPOWERED TO DISTURB THE WDV OF AN ASSET, WHICH IS THE CLOSING WDV OF AN ASSET 9 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 OF PRECEDING YEAR AND RE - CALCULATE THE DEPRECIATION IN ANY MANNER , ON THE OPENING WDV OF AN ASSET . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF MA DRAS IN ACE INVESTMEN TS (P.) LTD. VS. CIT (SUPRA) . HOWEVER, IN THE ABSENCE OF ANY FRESH EVIDENCE BEING BROUGHT ON RECORD BY THE REVENUE AUTHORITIES , THE ASSESSING OFFICER CANNOT RE - WORK THE DEPRECIATION ALLOWABLE ON WDV OF AN ASSET . THUS, WE HOLD THAT THE ASSESSING OFFICER IS NOT EMPOWERED TO DISTURB THE CLAIM OF DEPRECIATION ON WDV OF AN ASSET, WHICH WAS INSTALLED IN THE EARLIER YEARS. WE FIND NO MERIT IN THE ORDER OF ASSESSING OFFICER IN BIFURCATING THE COST OF WINDMILL INTO COST O F WIND TURBINE, COST OF ERECTION AND INSTALLATION OF WINDMILLS AND CIVIL CONSTRUCTION WORK VIS - - VIS WIND TURBINE NO.1, WHICH WAS INSTALLED IN ASSESSMENT YEAR 2006 - 07 . 12. THE SECOND PART OF THE ISSUE BEFORE US IS IN RELATION TO THE WINDMILL INSTALLED B Y THE ASSESSEE IN THE YEAR UNDER APPEAL. THE ASSESSEE HAD PURCHASED A WINDMILL FOR CONSOLIDATED PRICE OF RS.90 LAKHS FROM M/S. SOUTHERN WIND FARM LTD. VIDE INVOICE DATED 28.02.2007 . THE COPY OF THE INVOICE IS AVAILABLE ON RECORD. THE INVOICE DOES NOT BI FURCATE BETWEEN COST OF WINDMILL AND THE ALLIED EXPENSES TO BE INCURRED FOR THE ERECTION AND INSTALLATION OF THE WINDMILL AND OTHER CONSTRUCTION THEREOF. IN THE ABSENCE OF THESE REQUISITE DETAILS BEING AVAILABLE ON RECORD, WE FIND NO MERIT IN THE ORDER OF ASSESSING OFFICER IN BIFURCATING THE COST OF WINDMILL INTO DIFFERENT HEADS OF EXPENSES, AGAINST WHICH THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS ENTITLED TO THE CLAIM OF DEPRECIATION AT DIFFERENT RATES. AS PER THE ASSESSING OFFICER , COST OF WIND TU RBINE ENTITLES THE ASSESSEE TO THE DEPRECIATION @ 80%. HOWEVER, THE COST OF ELECTRICAL INSTALLATION WOULD ATTRACT DEPRECIATION @ 15% AND THE COST OF CIVIL CONSTRUCTION WOULD ATTRACT DEPRECIATION @ 10% . T HE FOUNDATION WORK WAS AN INTEGRAL PART OF THE MACH INERY, SINCE THE MACHINERY CANNOT FUNCTION WITHOUT FOUNDATION. IN OTHER WORDS, EVEN IN CASES WHERE THE ASSESSEE HAS INCURRED 10 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 SEPARATE EXPENDITURES ON THE COST OF FOUNDATION AND INSTALLATION OF THE MACHINERY, THEN THE SAME IS TO BE CONSIDERED AS AN INTEGRA L PART OF COST OF WIND MILL, W HICH IN TURN IS ENTITLED TO HIGHER RATE OF DEPRECIATION @ 80%. SIMILARLY, VARIOUS ELECTRICAL ITEMS INSTALLED, WHICH IN TURN ENSURES THE FUNCTIONING OF WINDMILL, FORMS PART OF WINDMILL AND IS ENTITLED TO THE DEPRECIATION @ 80%. ACCORDINGLY, WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION @ 80% ON COST OF WINDMILL AT R S.90 LAKHS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, DISMISSED. 13. NOW, COMING TO T HE APPEAL FILED BY THE ASSESSEE IN ITA NO.1495/PN/2011 RELATING TO ASSESSMENT YEAR 2008 - 09, IN WHICH ISSUE RAISED IS IN RESPECT OF WDV OF TWO WINDMILLS I.E. ONE PURCHASED IN ASSESSMENT YEAR 2006 - 07 AND THE OTHER PURCHASED IN ASSESSMENT YEAR 2007 - 08 . IN LINE WITH OUR ORDER IN THE PARAS HEREINABOVE, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE D EPRECIATION @ 80% ON WDV OF WINDMILL, WHICH IN TURN IS CLOSING WDV OF THE PRECEDING YEAR. THE ASSESSEE ADMITTEDLY, HAS NOT INSTALLED ANY OTHER WINDMILL IN THE INSTANT YEAR. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED IN ASSESSMENT YEAR 2008 - 09 . 14. IN ITA NO. 2484/PN/2012 , THE GRIEVANCE OF THE ASSESSEE IS TWO - FOLD I.E. DEPRECIATION ON WDV OF THE WINDMILL, VALUE OF WHICH ASSETS ARE BROUGHT FORWARD FROM THE PRECEDING YEAR. FURTHER, THE ASSESSEE IS AGGRIEVED BY NON - ALLOWING DEPRECIATION @ 80% ON THE WHOLE COST OF WINDMILL, WHICH WAS ERECTED IN ASSESSMENT YEAR 2009 - 10. 15. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE DECIDED BY US IN ASSESSMENT YEAR 2007 - 08 . FOLLOWING THE SAME LINE OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION @ 80% ON THE WHOLE COST OF WINDMILL, ADDITION O N WHICH HAS BEEN MADE IN THE CURRENT ASSESSMENT YEAR 11 ITA NO. 814 /PN/201 1 ITA NO. 890 /PN/201 1 ITA NO.1495/PN/2011 ITA NO.2484/PN/201 IRRESPECTIVE OF THE FACT WHETHER THE SUPP LIER HAD ISSUED SEPARATE BILLS. THE EXPENDITURE INCURRED BY THE ASSESSEE ON VARIOUS ITEMS IS PART AND PARCEL OF THE WINDMILL ON WHICH THE ASSESSEE IS ENTITLED TO THE CLAIM OF DEPRECIATION @ 80%. FURTHER, THE ASSESSEE IS ALSO ENTITLED TO THE CLAIM OF DEPR ECIATION @ 80% ON WDV OF WINDMILL PURCHASED IN THE EARLIER YEARS. THE ASSESSING OFFICER IS THUS, DIRECTED ACCORDINGLY. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 16 . IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF NOVEMBER , 2015. SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / / PUNE ; DATED : 9 TH NOVEMBER , 2015 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A), KOLHAPUR ; 4. / THE CIT - I / II , KOLHAPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE