THE ACIT, (CENTRAL)-I, Indore V. M/S. D.P. WIRES PVT. LTD., Indore

ITSSA 4/IND/2016

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2251 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 15-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJIV VARSHNEY
• Assessee Lawyers: ARPIT GOUR
• Keywords: Capital asset; Depreciation; Documents seized
• Section: 153A; 32

Judgement Text

ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA,JM AND SHRI O.P.MEENA,AM IT(SS)A NOS. 2 TO 6/IND/2016 A.YS.2007-08 TO 2011-12 ITA NO. 74/IND/2016 A.Y. 2012-13 ASSTT.COMMR. OF INCOMETAX (CENTRAL)-I INDORE ::: APPELLANT VS M/S D.P. WIRES PVT. LTD. MUMBAI PAN AABCD 2393P ::: RESPONDENT APPELLANT BY SHRI RAJIV VARSHNEY RESPONDENT BY SHRI ANIL GARG & SHRI ARPIT GOUR DATE OF HEARING 26.7.2016 DATE OF PRONOUNCEMENT 26.7.2016 O R D E R PER BENCH ALL THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE CONSOLIDATED ORDER DATED 30.10.2015 PASSED BY THE LEARNED CIT(A)-III, INDORE. ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 2 2. THE COMMON GROUND INVOLVED IN ALL THESE APPEALS IS THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF DEPRECIATION DISALLOWANCE @ 80% ON WINDMILL AS THE NECESSARY CONDITIONS FOR CLAIMI NG DEPRECIATION U/S 32 OF THE ACT WERE NOT FULFILLED BY THE ASSESSEE. 3. WE HAVE HEARD BOTH THE SIDES. AN IDENTICAL ISSUE HAD COME UP BEFORE INDORE BENCH OF THE TRIBUNAL IN THE C ASE OF M/S KATARIA INDUSTRIES PVT. LTD. IN IT(SS) A NO. 281/IND/2014 AND IT(SS) A NOS. 293 TO 297/IND/2014 AN D THE TRIBUNAL VIDE ITS ORDER DATED 11.1.2016 HAS DECIDE D THE SAME BY OBSERVING AS UNDER :- 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAG ED IN THE BUSINESS OF MANUFACTURING AND SALE OF STEEL WIRE, PLASTIC, CABLES, CONDUCTORS AND ALSO GENERATION OF WING POWER ENERGY THROUGH WIND MILLS AND SALE THEREOF. IN SOME OF THE REVENUES APPEALS ONE OF THE ISSUES INV OLVED ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 3 IS DEPRECIATION ON WIND MILL. THE ASSESSEE COMPANY HAS PURCHASED 2 WIND MILLS IN THE ASSESSMENT YEAR 2008- 09 FROM M/S ENERCON INDIA LIMITED BY ENTERING INTO TUR N- KEY CONTRACTS. THE ASSESSING OFFICER DID NOT ALLOW DEPRECIATION. HOWEVER, THE LEARNED CIT(A) GRANTED R ELIEF TO THE ASSESSEE BY HOLDING AS UNDER :- 5.1 I HAVE GONE THROUGH THE RELEVANT PARAS O F ASSESSMENT ORDER WHEREIN THE A.O. HAS GIVEN REASONS FOR DISALLOWING THE DEPRECIATION CLAIMED @80% ON WI ND MILL PLANT. I HAVE ALSO GONE THROUGH THE WRITTEN SUBMISSIONS OF THE APPELLANT WHICH ARE REPRODUCED ABOVE. THE VARIOUS DOCUMENTS FILED IN SUPPORT OF CL AIM FILED IN THE FORM OF PAPER BOOK HAVING 430 PAGES HA VE ALSO BEEN GONE THROUGH. 5.2 THE ORDER PLACED BY THE APPELLANT TO PURCHASE T HE WIND MILL RELEVANS THAT IT IS A TURNKEY CONTRACT FO R TRANSPORTATION, INSTALLATION, ERECTION, COMMISSIONI NG AND ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 4 MAINTENANCE OF THE PLANT. THE PURCHASE AND OWNERSHI P OF PLANT HAVE BEEN EVIDENCED THROUGH VARIOUS DOCUMENTS VIZ. I.E PURCHASER ORDER FOR THE WIND MIL L, II NATURE OF CONTACT WHICH IS FOUND TO BE ASED ON TURN KEY, III. SALE INVOICES RAISED BY M/S ENERCON INDIA LTD. , IV. TRIPARTITE AGREEMENT AMONGST APPELLANT, M/S RAJASTH AN RENEWAL ENERGY CORPORATION LTD. ANDM/S ENERCON IND IA ISSUED BY M/S AJMER VIDYUT VITARAN NIGAM LTD. VI. C OPY OF SUBLEASE OF LAND, ON WHICH WIND MILL WAS INSTALL ED, EXECUTED IN FAVOUR OF APPELLANT, VII. INSURANCE POL ICY ON THE PLANT IN FAVOUR OF APPELLANT, VIII. CERTIFICATE OF GENERATION OF POWER ISSUED BY RESPECTIVE ELECTRICIT Y BOARDS, IX. COPIES OF DEBIT NOTES RAISED TOWARDS SA LE OF ENERGY, X. COPIES OF BANK STATEMENTS IN WHICH THE S ALE PROCEEDS OF ELECTRICITY RECEIVED FROM ELECTRICITY B OARDS, HAVE BEEN CREDITED, XI. PHOTOGRAPHS OF PLANT HAVING NAME OF APPELLANT INSCRIBED ON THE WIND MIL.IT IS A LSO NOT ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 5 DISPUTED THAT THE APPELLANT HAS REFLECTED THE INCOM E ON ACCOUNT OF SALE OF ELECTRICITY TO GOVERNMENT OWNED ELECTRICITY BOARDS. THE A.O. HAS DISCUSSED THE CONT ENTS OF PURCHASE AGREEMENT AMONGST THE APPELLANT AS POWWER PRODUCER, M/S ENERCON INDIA LTD. AS DEVELOPE R AND M/S RAJASTHAN RAJYA VIDYUT PRASARAN NIGAM LTD. IT HAAS BEEN NOTICED BY THE A.O.THAT PERMISSION TO SET THER WIND ENERGY HAS BEEN GIVEN TO M/S ENERCON INDIA LTD . AND FURTHER IT IS ALSO BROUGHT OUT THAT M/S ENERCON INDIA LTD. HAS FACILITATED THE APPELLANT TO INJECT AND TR ANSMIT THE ENERGY SO GENERATED IN THE STATE GRADE. THESE A RE THE OPERATIONAL FACILITIES PROVIDED BY M/S ENERCON INDIA LTD. HAVING TECHNICAL KNOWHOW TO THE PURCHASER OF A LL THE WIND MILL WHICH CANNOT VITIATE THE OWNERSHIP OF THE PLANT AND THE FACT THAT THE APPELLANT HAS MADE HUGE INVESTMENT AND RECEIVED THE SALE PROCEEDS OF ELECTR ICITY. FURTHER AT PARA 10.9 OF THE ASSESSMENT ORDER THE A. O. ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 6 HAS BROUGHT OUT AND DISCUSSED VARIOUS DOCUMENTS SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS WHIC H ARE USED AS INDICATORS THAT THE APPELLANT IS NOT TH E REAL OWNER OF THE WIND MILL. I HAVE GONE THROUGH THESE P APERS AND FOUND THAT NONE OF THE PAPERS AS DSICUSSED UNDE R PARA10.9 ESTABLISH THAT THE APPELLANT IS NOT THE RE AL OWNER OF THE WIND MILL. THE PAPER LISTED AT SERIAL NO. II. I.E. LPS-A1/35, PAGE 98 IS A LETTER WRITTEN BY SR.MANAGER, PROJECT CO-ORDINATION, ENERCON INDIA LT D. WHICH IS ADDRESSED TO M/S P.D. POWER I.E. THE APPEL LANT AND ENCLOSES ORIGINAL POWER PURCHASE AGREEMENT BETWEEN D.P.AND GUJARAT URJA VIKAS NIGAM. THE PAPER LISTED AT SERIAL NO. III O.E. LPS-A1/35 PAGE 46 IS A LSO A LETTER WRITTEN BY M/S ENERCON INDIA LTD. TO THE APP ELLANT WHEREBY COMMISSIONING CERTIFICATE FROM GEDA HAS BEE N FORWARDED. SIMILARLY THE PAPER LISTED AT SERIAL NO. IV, I.E. LPS-A1/35 PAGE 42 IS A LETTER FROM M/S ENERCON INDIA ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 7 LTD. TOD.. POWER INTIMATING THE DATE FOR REGISTRATI ON OF LAND LEASE AGREEMENT WITH THE APPELLANT IN THE OFFI CE OF SUB-REGISTRAR, KALYANPUR, DISTRICT JAMNAGAR, GUJARA T. THE PAPER LISTED AT SERIAL NO. V, LPS A1/12 IS ALSO A LETTER WRITTEN BY G.M. (MARKETING), M/S ENERCON IND IA LTD. WRONGLY WRITTEN BY A.O. AS SR. MANAGER, PROJEC T CO- ORDINATION REGARDING REALISATION TOWARDS THE SALE O F WERS AFTER ADJUSTMENT OF PROCESSING CHARGES PERTAIN ING TOD.P. POWER. SIMILARLY, THE PAPER LISTED AT SERIAL NO. VI IE. LPS-A1/19 PAGE 56 WRONGLY WRITTEN AS PAGE NO. 52 AND CLARIFIED BY A.O. DURING THE COURSE OF APPEAL PROCEEDINGS AS IS ALSO A LETTER FROM D.P. POWER, TH E APPELLANT TO M/S ENERCON INDIA LTD. WHEREBY A CHEQU E OF RS.1.01 CRORES HAS BEEN FORWARDED FOR PURCHASE O F VARIOUS MACHINERY RELEVANT TO WIND MILL. THE PAPER LISTED AT SERIAL NO. VII. I.E. LPS-A1/12, PAGE 49 IS ALSO FOUND TO BE THE LETTER WRITTEN BY SR. MANAGER,PROJE CT ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 8 COORDINATION TO D.P. POWER REGARDING GEDA FORM AND SUB LEASE DEED. ALL THESE DOCUMENTS ARE IN THE NATR UE OF FACILITATION GIVEN BY THE M/S ENERCON INDIA LTD. WH O WAS FOUND ENGAGED FOR LOOKING AFTER THE AFFAIRS OF THE APPELLANT. I DO NOT SEE ANY CONTENT IN THESE LETTER S TO PROVE THAT EITHER THE APPELLANT WAS NOT THE OWNER/POSSESSOR OF THE WIND MILL OR THE REALISATION ON ACCOUNT OF SALE OF ELECTRICITY WERE NOT RECEIVED BY THE APPELLANT COMPANY. 5.3 IT IS ALSO SEEN THAT M/S ENERCON INDIA LTD. IS A MULTI-NATIONAL COMPANY WHICH HAS PAID ITS PART OF T AXES ON THE INCOME EARNED ON SALE OF WIND MILLS. ACCORDI NG TO INDIAN WIND FARM DICTIONARY AS MANY AS 5000 WIND MILLS HAVE BEEN SOLD AND COMMISSIONED BY IT IN THE SAME MANNER AS HAS BEEN DONE FOR THE APPELLANT. THE OWNERSHIP OF WIND MILL CAN BE SAID TO HAVE PASSED I N FAVOUR OF APPELLANT ON THE DATE OF INVOICE RAISED B Y THE ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 9 SUPPLIER. M/S ENERCON INDIA LTD. HAS NOT CLAIMED DEPRECIATION ON THE MACHINE AT ANY STAGE AS AN OWNE R. IT IS OBSERVED THAT THE APPELLANT BESIDES INVESTING ITS CAPITAL HAS RAISED LOAN FROM SBI AGAINST HYPOTHECAT ION OF WIND MILL. THIS FACT IS FOUND EVIDENCED THROUGH A SANCTION LETTER DATED 14.9.2007. THEREFORE, INVESTM ENT MADE FOR ACQUIRING A PLOT WITH MOTIVE OF EARNING PR OFIT CANNOT BE CONSTRUED AS SIMPLE FINANCIAL TRANSACTION . 5.4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF IT ACT, 1961 SPECIFIC INQUIRIES HAVE BEEN F OUND MADE FROM THE SUPPLIER OF MACHINE REGARDING TRANSFE R OF OWNERSHIP AND FROM GUJARAT ELECTRICITY BOARD AND M. P. ELECTRICITY BOARD REGARDING PURCHASE OF ELECTRICITY GENERATED BY THE WIND MILL UNDER CONSIDERATION. BOT H THE COMPANY AND ELECTRICITY BOARDS HAVE CONFIRMED T HE GENUINENESS OF TRANSACTIONS AND QUERIES RAISED BY T HE AUTHORITIES HAD BEEN APPROPRIATELY REPLIED TO. THE A.O. IS ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 10 FOUND TO HAVE VISITED PERSONALLY OR THROUGH STAFF T O SEE THE INSTATLLATION AND OWNERWHIP OF THE WIND MILL . THE TECHNICAL ISSUES RELATED TO INSTALLATION OF PLANT, BILLING ETC. ARE STATED TO HAVE BEEN DISCUSSED WITH THE STA FF AT SITE. A FEW PHOTOGRAPHS OF SUCH VISITES HAVE BEEN F ILED BY APPELLANT WHICH ARE PLACED ON RECORD. THEREFORE, THE EXISTENCE AND INSTALLATION OF WIND MILLS WITHIN SPE CIFIED PERIOD ARE NOT DISPUTED. 5.5 THE CONTENTION OF THE A.O. THAT M/S ENERCON IND IA LTD. HAS SOLD WIND MILL TO FACILITATE THE APPELLANT TO CLAIM THE DEPRECIATION HAS NOT BEEN BORNE OUT OF THE FACT S AND CIRCUMSTANCES OF THE CASE. IF THE OWNERSHIP OF MILL IS NOT TRANSFERRED WHY SHOULD THE COMPANY PAY THE TAXES ON THE INCOME EARNED ON SUCH TRANSACTION AND LOSE THE BENEFIT OF DEPRECIATION. THE A.O. HAS ALSO NOT DISP UTED THE INCOME EARNED AND OFFERED BY APPELLANT COMPANY ON ACCOUNT OF SALE OF POWER GENERATED THROUGH THESE WI ND ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 11 MILLS FOR TAXATION PURPOSE. THEN THERE IS NO REASON WHY THE OWNERSHIP AND CLAIM OF DEPRECIATION ON WIND MIL L COULD BE DOUBTED. THE INSTALLATION AND MAINTENANCE OF PLANT BY M/S ENERCON INDIA LTD. IS A NORMAL FEATURE IN TURNKEY PROJECTS PARTICULARLY WHEN THE COMPANY IS SPECIALISED IN THE FILED OF OPERATION, TRANSMISSION AND MAINTENANCE OF SUCH PLANT. MOREOVER, IT IS OBSERVED THAT THE COMPANY HAS A RECOVERED RECURRING CHARGES ON SU CH SERVICES FROM THE APPELLANT. THEREFORE, IS MY OPINI ON, THE OPERATION AND MAINTENANCE OF PLANT BY THE SUPPLIER COMPANY BEING IN POSSESSION OF TECHNICAL KNOWHOW, DOES NOT TAKE AWAY THE RIGHT OF OWNERSHIP OF WINDMI LL FROM THE APPELLANT. 5.6 TRANSFER AND SALE ARE DEFINED IN RESPECTIVE A CTS I.E. TRANSFER OF PROPERTY ACT AND SALE OF GOODS ACT . ACCORDING TO THESE STATUTES, THE SALE BECOMES COMPL ETE ONCE THE INVOICE IS RAISED IN FAVOUR OF BUYER FOR T HE PRICE ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 12 PAID BY IT UNDER A CONTRACT OF SALE. THEREFORE, TRA NSFER OF OWNERSHIP IS COMPLETE ONCE THE SALE IS COMPLETE. TH E SECTION 2(47) OF INCOME TAX ACT DEFINES THE WORD TR ANSFER IN RELATION TO A CAPITAL ASSET WHICH INCLUDES SALE OR EXTINGUISHMENT OF RIGHTS THEREIN. THE SUBSECTION IV OF SECTION 2(47) INCLUDED ANY TRANSACTION INVOLVING OWNERSHIP OR ANY IMMOVABLE PROPERTY IN A PART PERFORMANCE OF CONTRACTS IN THE NATURE AS REFERRED IN SECTION 53(A) OF TRANSFER OF PROPERTY ACT. 5.7 IN THE INSTANT CASE, TRANSFER OF ASSET IS NOT O NLY COMPLETE IN TERMS OF TRANSFER OF PROPERTY ACT BY TH E BENEFITS OUT OF THE SAID ASSET HAVE ALSO BEEN DERIV ED BY THE APPELLANT IN THE FORM OF INCOME ON ACCOUNT OF S ALE OF ELECTRICITY TO VARIOUS PARTIES. MOREOVER, THERE IN NO DISPUTE THAT THE APPELLANT HAS MADE A HUGE INVESTME NT RUNNING INTO CRORES FOR INSTALLATION OF WIND MILLS PARTLY BY OBTAINING LOAN FROM THE FINANCIAL INSTITUTIONS. THESE ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 13 FACTS HAVE EEN EXAMINED BY A.O. FROM BOOKS OF ACCOU NTS OF APPELLANT AND ASCERTAINED FROM INDEPENDENT INQUR IES CONDUCTED BY THE A.O. FROM ELECTRICITY BOARDS REMIT TING THE PRICE OF ELECTRICITY DIRECTLY TO APPELLANT. TH E HON'BLE SUPREME COURT IN THE CASE OF MYSORE MINERALAS LTD. VS. CIT, 239 ITR 775 (SC) HAS HELD THAT THE BENEFIT OF DEPRECIATION HAS TO GO TO THE PERSON WHO MAKES THE CAPITAL INVESTMENT WHICH GRADUALLY REDUCES THE VALU E OF INVESTMENT. THE RELEVANT PART OF JUDGMENT IS REPROD UCED HEREUNDER :- IN OUR OPINION, THE TERM OWNED AS OCCURRING IN SECTION 32(1) OF THE INCOME TAX ACT, 1961 MUST BE ASSIGNED A WIDER MEANING. ANYONE IN POSSDSSION OF PROPERTY IN HIS OWN TITLE EXERCISING SUCH DOMINATION OVER THE PROPERTY AS WOULD ENABLE OTHERS BEING EXCLUDED THEREFROM AND HAVING THE RIGHT TO USE AND OCCUPY THE PROPERTY AND/OR TO ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 14 ENJOY ITS USEFRUCT IN HIS OWN RIGHT WOULD BE THE OWNER OF THE BUILDINGS THOUGH A FORMAL DEED OF TITL E MAY NOT HAVE BEEN EXECUTED AND REGISTYERED AS CONTEMPLATED BY THE TRANSFER OF PROPERTY ACT, THE REGISTRATION ACT, ETC. BUILDING OWNED BY THE ASSESSEE THE EXPRESSION AS OCCURING IN SECTION 32(1) OF THE INCOME TAX ACT MEANS THE PERSON WHO HAVING ACQUIRED POSSESSION OVER THE BUILDING IN HIS OWN RIGHT USES THE SAME FOR THE PURPOSES OF THE BUSIENSS OR PROFESSION THOUGH A LEGAL TITLE HAS NOT BEEN CONVEYED TO HIM CONSISTENTLY WITH THE REQUIREMENTS OF LAWS SUCH AS THE TRANSFER OF PROPERTY ACT AND THE REGISTRATION ACT, ETC. BUT NEVERTHELESS IS ENTITLED TO HOLD THE PROPERTY TO TH E EXCLUSION OF OTHERS. ..THE VERY CONCEPT OF DEPRECIATION SUGGESTS THAT THE TAX BENEFIT ON ACCOUNT OF DEPRECIATION LEGITIMATELY ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 15 BELONGS TO ONE WHO HAS INVESTED IN THE CAPITAL ASSE T IS UTILISING THE CAPITAL ASSWET AND THEREBY LOSING GRA DUALLY INVESTMENT CAUSED BY WEAR AND TEAR AND WOULD NEED T O REPLACE THE SAME BY HAVING LOST VALUE FULLY OVER A PERIOD OF TIME. 5.8 IN THE SAME CASE OF MYSORE MINERALS LTD. HON'BL E SUPREME COURT HAS HELD THAT KEEPING IN VIEW THE OB JECT AND SCHEME OF INCOME TAX ACT IN TAXING THE INCOME T HE REAL OWNER IS THER ONE WHO IS ENTITLED TO RECEIVE I NCOME FROM SUCH PROPERTY. THE RELEVANT PART OF DECISION I S REPRODUCED HEREUNDER :- WE ARE CONSCIOUS OF THE SETTLED POSITION THAT UNDE R THE COMMON LAW, OWNER MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLYING WITH THE REQUIREMENTS OF LAW SUCH AS THE TRANSFER OF PRO PERTY ACT, REGISTRATION ACT, ETC. BUT IN THE CONTEXT OF SECTION 22 OF THE INCOME TAX ACT, GHAVING REGARD TO THE GRO UND ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 16 REALITIES AND FURTHER HAVING REGARD TO THE OBJECT O F THE INCOME TAX ACT, NAMELY, TO TAX THE INCOME, WE ARE OF THE VIEW OWNER IS A PERSON WHO IS ENTITLED TO REC EIVED INCOME FROM THE PROPERTY IN HIS OWN RIGHT. 5.9 IN THE CASE OF MYSORE MINERALS LTD. THE DEPRECIATION WAS DISALLOWED ON THE GROUND THAT THE CAPITAL ASSET WAS NOT REGISTERED IN THE NAME OF ASSESSEE. WHEREAS IN THE CASE OF APPELLANT THE TRA NSFER OF WIND MILL HAS DULY TAKEN PLACE AS SOON AS THE SA LE BILL OF THE MACHINERY HAS BEEN RAISED AND CONSIDERATION FOR THE SAME HAS BEEN PAID. THEREFORE IN VIEW OF THE AB OVE, I DO NOT FIND ANY REASON TO DOUBT THE OWNERSHIP AND POSSESSION OF THE WIND MILL FOR CLAIMING DEPRECIATI ON AT HIGHER RATE. THE PURPOSE OF GIVING HIGHER RATE OF DEPRECIATION ON INSTALLATION OF WIND MILL IS TO HAR NESS AND ENCOURAGE GENERATION OF NON-CONVENTIONAL SOURCE OF ENERGY. DENIAL OF SAME SHALL MEAN THE DEFEAT OF ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 17 PURPOSE. IT HAS ALSO BEEN BROUGHT TO MY NOTICE THAT CIT(A) IN THE CASE OF APPELLANT HAVE ALLOWED SUCH DEPRECIATION ON GHIGHER RATE AND THE DEPARTMENT HAD NOT PREFERRED FURTHER APPEALS AGAINST SUCH DECISIONS. I N THE INSTANT CASE, THE OWNERSHIP HAS BEEN FURTHER POVED BY DIRECT INQUIRIES FROM THE SUPLIER/ELECTRICITY BOARD AND PHYSICAL VERIFICATION OF EXISTENCE OF SAME THROUGH SPOT VISITS. THEREFORE, I DO NOT FIND ANY ADVERSE MATERI AL BROUGHT OUT BY THE A.O. TO CONTROVERT THE FINDINGS OF THEN CSIT(A) IN THE CASE OF M/S P.D. POWER, AN ASSOCIATE CONCERN OF THE APPELLANT. 5.10 IN VIEW OF THE ABOVE DISCUSSION, IT IS APPAREN T THAT THE APPELLANT HAS OWNED AND POSSESSIOED THE WIND MI LL MADE HUGE INVESTMENT SOLD ELECTRICITY TO VARIOUS ELECTRICITY BOARDS, REFLECTED THE SALE PROCEEDS OF ELECTRICITY IN BOOKS OF ACCOUNTS DURING THE PERIOD UNDER CONSIDERATION. THEREFORE, THE ACTION OF A.O. DENYIN G THE ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 18 DEPRECIATION CANNOT BE SUSTAINED. ACC A.O. IS DIREC TED TO ALLOW THE DEPRECIATION @ 80% IN THE RELEVANT A.YS. FROM A.Y. 2006-07 TO A.Y. 2012-13 AS PER PROVISIONS OF INCOME TAX ACT, 1961. THESE GROUNDS OF APPEAL ARE ALLOWED. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER WHEREAS THE LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE ORDER OF THE LEARNED CIT(A). 4. WE HAVE HEARD BOTH THE SIDES. AFTER HEARING WE A RE OF THE VIEW THAT THE ASSESSEE WAS ABLE TO ESTABLISH TH E OWNERSHIP OF THE WIND MILL BY WAY OF FILING FOLLOWI NG DOCUMENTS :- A) PURCHASE ORDERS FOR WIND TURBINE (WIND MILL) PLACED TO M/S. ENERCON INDIA LTD AS PER TURN-KEY CONTRACT I.E. FOR SUPPLY OF WIND MILL, TRANSFORMERS & TOWER, ERECTION AND COMMISSIONING OF THE WIND MILL AT SITE . B) COPIES OF INVOICES RAISED BY THE SUPPLIER OF WIND MILLS I.E. M/S. ENERCON INDIA LTD. DURING A.Y. 2003 - 04 & 2007-08 C) THE SUB- LEASE DEED OF LAND BY M/S. ENERCON INDI A ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 19 LTD IN THE FAVOUR OF APPELLANT FOR SETTING UP THE W IND MILL. D) COPY OF SANCTION LETTERS ISSUED BY HDFC BANK LTD WHO SANCTIONED TERM LOAN AGAINST HYPOTHECATION OF WIND MILLS. E) TRI-PARTY AGREEMENTS EXECUTED ON VARIOUS DATES BETWEEN M/S. RAJSTHAN RAJYA VIDYUT PRASARAN NIGAM LIMITED (RVPN), M/S. ENERCON INDIA LTD AND THE APPELLANT WHEREBY AFTER INSTALLATION, ERECTION AND COMMISSIONING, RVPN HAD AGREED TO PURCHASE POWER GENERATED IN THE WIND MILL. F) COMMISSIONING CERTIFICATES ISSUED BY JVVNL AND GEDA G) CERTIFICATE OF GENERATION OF POWER ISSUED BY RESPECTIVE JVVNL. H) INSURANCE POLICY IN FAVOUR OF OWNER OF THE WIND MIL LS I.E. APPELLANT ISSUED BY INSURANCE COMPANY. I) SPECIMEN COPIES OF DEBIT NOTES RAISED BY THE APPELLANT TO STATE ELECTRICITY BOARDS BASED ON ELECTRICITY UNITS GENERATED AND TRANSMITTED IN POWE R GRID AND COPIES OF BANK STATEMENTS OF HDFC IN SUPPORT OF PAYMENT RECEIVED. WE ALSO FIND THAT THE ASSESSEES NAME ALSO FIGURES IN THE LIST OF WIND FARM OWNERS OF INDIA. M/S ENERCON INDIA LTD. HAS RECORDED SALES OF WIND MILLS TURBINE TO THE ASSESSEE. THE ASSESSEE HAS ALSO GOT TERM LOAN ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 20 SANCTIONED FROM THE BANK AND ALSO THE INSURANCE POLICIES IN ITS NAME. ALL THESE PROVE THE OWNERSHI P BEYOND ANY DOUBT. WE WOULD LIKE TO STATE THAT DURIN G THE SEARCH OPERATION CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 7.11.2011. NO INCRIMINATING DOCUMENT PERTAINING TO PURCHASES OF THE WIND MILL TURBINES W ERE FOUND AND SEIZED. ONLY REGULAR PAPERS AND CORRESPONDENCE RELATING TO M/S D.P. POWER WERE FOUN D AND SEIZED. THESE DOCUMENTS WERE ONLY PURCHASE INVOICES OF THE WIND MILLS, COMMISSIONING CERTIFICA TE, LAND LEASE AGREEMENT WITH ENERCON INDIA LIMITED AND LETTERS ISSUED BY ELECTRICITY BOARD REGARDING FORWA RDING OF CHEQUES IN FAVOUR OF THE FIRM, THEREFORE, THESE PAPERS CANNOT BE SAID TO BE INCRIMINATING DOCUMENTS. THE ASSESSING OFFICER HAS PHYSICALLY VERIFIED THE LOCAT ION OF DIFFERENT WIND MILLS, THEREFORE, WE ARE NOT ONLY UPHOLDING THE ORDER OF THE LEARNED CIT(A) ON THIS I SSUE ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 21 BUT WE ALSO TEND TO ALLOW THE GROUNDS REGARDING VAL IDITY OF ASSESSMENT RAISED IN THE CROSS OBJECTION OF THE ASSESSEE IN THE ASSESSMENT YEARS WHERE NO ASSESSMENT WAS ABATED. 4. FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL, WE UPH OLD THE CONSOLIDATED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE AND ALLOW THIS GROUND OF APPEAL IN ALL THESE APPEALS. 5. IN THE RESULT, ALL THE APPEALS OF THE REVENUE STAND DISMISSED. PRONOUNCED IN OPEN COURT ON 26 TH JULY, 2016 SD/- SD/- (O.P. MEENA) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER 26 TH JULY, 2016 DN/- ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 22 ACIT VS. M/S D.P. WIRES IT(SS) A NOS. 2 TO 6/IND/2016 & ITA 74/IND/2016 23