M/s Lanco Infratech Limited, Hyderabad V. Dy.CIT, Circle-16(1), Hyderabad

MA 101/HYD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2060 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 27-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P MURALI MOHAN RAO
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MISC. APPLN. NO.100/HYD/2014 (IN ITA NO.252/HYD/13) : ASSESSMENT YEAR 2002 - 03 MISC. APPLN. NO.101/HYD/2014 (IN ITA NO.253/HYD/13) : ASSESSMENT YEAR 2003 - 04 M/S. LANCO INFRATECH LIMITED, HYDERABAD ( PAN - AA A C L 4 3449 H ) V/S. DY. COMMISSIONER OF INCOME - TAX, CIRCLE 16(1), HYDERABAD (APPLIC ANT) (RESPONDENT) APPLICANT BY : SHRI SOLGY JOSE T.KOTTARAM DR RESPONDENT BY : SHRI P.MURALI MOHAN RAO DATE OF HEARING 27 .0 6 .2014 DATE OF PRONOUNCEMENT 27.06.2014 O R D E R PER SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER: BY THESE MISCELLANEO US APPLICATIONS FILED UNDER S.254(2) OF THE INCOME TAX ACT, 1961, ASSESSEE SEEKS RECTIFICATION/RECALL OF THE CONSOLIDATED ORDER OF THIS TRIBUNAL DATED 1.3.2013 INSOFAR AS IT RELATES TO ITA NOS.252 AND 253/HYD/2013 FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04, ON THE GROUND THAT CERTAIN MISTAKES APPARENT FROM RECORD HAVE CREPT INTO THE SAME. 2. REITERATING THE AVERMENTS MADE IN THE PRESENT APPLICATIONS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DEALING WITH THE GRIEVANCE OF THE REVENUE IN RELATION TO THE RELIEF GRANTED BY THE CIT(A) TO THE ASSESSEE WITH REGARD TO CLAIMS FOR DEPRECIATION ON ELECTRICAL EQUIPMENT FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE TRIBUNAL IN PARA 11 AND 12 HELD AS FOLLOWS - MA NO.100 & 101/HYD/2014 (IN ITA NO .252 & 253 /HYD/201 3) M/S. LANCO INFRATECH LIMITED, HYDERABAD 2 11 .HOWEVER NO SUCH INT ENTION HAS EVER HAS BEEN EXPRESSED IN THE LEGISLATIVE TO PROVIDE HIGHER RATE O F DEPRECIATION IN RESPECT OF GENERATOR SURROUNDING THE WINDMILL. RA THER THE APPENDIX AN D THE DEPRECIATION SCH E DULE HAS CATEGORICALLY WORDED THAT WINDMILLS AND ANY SP E CIFICALLY DESIGNED DEVICES WHICH RUN ON WIND MILLS ARE QUALIFIED FOR 100 PERCENT RATE O F DEPR E CI A TION. SIN C E THE GENERATORS ARE NO T SPECIFICALLY DESIGNED DEVICES HENCE IN OUR CON S I D ERED OPINION, AS P E R THE DISCUSSION MADE HEREIN ABOVE, ARE NO T ENTITLED FOR HI G H E R D EPRECIATION AS CL A IM E D BY THE ASSESSEE. IN VIEW OF TH E ABOVE DI S CUSSION, WE REVER S E THE ORDER O F TH E CIT(A) AND R E STORE THAT OF THE ASSESSING OFFICERS ORDER. ACCOR D INGLY, THE GROUNDS RAISED BY TH E REVENUE ON THE ISSUE IN BOTH THE APPEALS ARE ALLOWED. 12. IN THE RESULT, BOTH THE APP E ALS IN ITA NOS.252 & 253/HYD/2013 FOR AY 2002 - 03 AND 2003 - 04 ARE ALLOWED. IT IS SUBMITTED THAT THE WINDMILL I S TECHNICALLY REFERRED AS WIN D ELE C TRIC GENERATOR. IN FACT, THE WIND MILL OR THE WIND ELECTRIC GENERATOR, CONT AINS A P A RT WITHIN IT WHICH IS CALLED ELECTRIC GEN E RATOR . IT IS ALSO SUBMITTED THAT THE ASSET UNDER CON S I D ERATION IS THE ENTIRE WINDMILL UNI T AND NOT JUST THE ELECT R IC GEN E RATOR, WHICH IS QUALI F I E D FOR 100 PERCENT RATE O F DEPRECIATION. THE ASSESSING OF FICER, IT IS SUBMITTED, WAS UNDER AN ERRONEOUS IMPRESSION THAT WIND ELE C TRIC GEN E RATOR IS DIFFERENT FROM A WIN D MILL, JUST BY REFERRING TO THE NOMENCLATURE ON THE INVOICE WIND ELECTRI C GENER ATOR AND ACCORDINGLY DISPUTED THE DEPRECIATION CLAIM ON THE WINDM ILL. IT IS FURTHER STATED THAT THE AMOUNT ON WHICH DEPR E CIATION WAS CLAIMED WAS ON THE ENTIRE COST OF THE WINDMILL AND NO T ON THE ELECTRIC GEN E RATOR. IT WAS ALSO CL A RIFIED THAT IT WAS THE NORMAL PRACTICE OF THE SUPPLIER TO MENTION ONLY WIND ELECTRIC GEN E RATORS IN THE INVOICES IN S TEAD O F WINDMILL WITH COMPLETE LIST OF COMPONENTS SUPPLIED. EL E CT R IC GEN E RATOR IS ONLY A PART OF THE ENTIRE WINDMILL UNIT, AND IN REPLY TO THE NO T I C ES ISSUED BY THE DEPARTMENT, REQUISITE INFORMATION WAS SUBMITTED FOR THE VERIF ICATION OF THE N A TURE OF WIND ELECTRIC G EN E RATOR . I T IS ONLY AFTER VERIFICATION OF SUCH INFORMATION ALREADY FURNISHED, AND AFTER EXAMINATION OF THE FUNCTIONAL PARAMETERS , THE CIT(A) O PINED THAT THE WIND POWER PROJECT CANNOT BE OPERATIONAL WITHOUT THE WIND ELECTRIC GENERATORS, AND ACCORDINGLY ALLOWED RELIEF TO THE ASSESSEE. THE ORDER OF THE TRIBUNAL DATED 1.3.2013 IS ERRONEOUS INASMUCH AS IT PROCEEDED TO EXAMINE THE MATTER OF THE MA NO.100 & 101/HYD/2014 (IN ITA NO .252 & 253 /HYD/201 3) M/S. LANCO INFRATECH LIMITED, HYDERABAD 3 ASSESSEES CLAIM FOR DEPRECIATION, AS IF IT IS ONLY ON WIND ELECTRIC GENERATO R AND NOT ON THE WIND MILL AS A UNIT. AS SUCH, HE PRAYED THAT THE ORDER OF THE TRIBUNAL DATED 1.3.2013 NEEDS TO BE RECTIFIED/RECALLED. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON TH E OTHER HAND, SUBMITTED THAT THERE SI NO MISTAKE A PPARENT FROM RECORD IN THE ORDER O F THE TRIBUNAL DATED 1.3.2013. 4 . WE HEARD BOTH SIDES IN THE LIGHT OF THE AVERMENTS MADE IN THE PRESENT APPLICATION AND THE ORDER OF THIS TRIBUNAL DATED 1.3.2013 IN ITA NO. 252 AND 253 /HYD/2012 OF THE REVENUE . AS IS EVIDENT FROM THE REL EVANT PORTION OF PARA 11 EXTRACTED ABOVE, THE TRIBUNAL HAS PROCEEDED TO EXAMINE THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON WINDMILL, AS IF IN RESPECT OF GENERATOR SURROUNDING THE WINDMILL , AND CONCLUDED THAT SIN C E THE A PPENDIX AND THE D EPRECIATION S C HEDULE HAS CATEGORICALLY WORDED THAT WINDMILLS AND ANY SPECIALLY DESIGNED DEVICES WHICH RUN ON WIND MILLS AS QUALIFYING FOR 100 PERCENT DEPRECI A TION, SET ASIDE THE ORDERS OF THE CIT(A) AND RESTORED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IN THAT B EHALF, THUS ALLOWING THE APPEALS OF THE REVENUE. IN THE SE CIRCUMSTANCES, WE FIND THAT AS MADE OUT BY THE ASSESSEE IN THE PRESENT APPLI C A T ION, THERE IS MISTAKE IN THE ORDER OF THE TRIBUNAL IN THE MATTER OF VERY IDENTITY OF THE ASSET ON WHICH DEPRECIATION WA S CLAIMED BY THE ASSESSEE, I.E. WHETHER IT IS WINDMILL AS A WHOLE WHICH IS ELIGIBLE FOR 100% DEPRECIATION, OR IT IS ONLY GENERATOR SURROUNDING THE WINDMILL , AND AS SUCH, THE MATTER NEEDS TO BE RE - EXAMINED CONSIDERING ALL THE RELEVANT ASPECTS IN CORREC T PERSPECTIVE. WE ACCORDINGLY RECALL OUR ORDER DATED 1.3.2013, INSOFAR AS IT RELATES TO ITA NO.252 AN 253/HYD/2013 FOR THE ASSESSMENT YEARS 2002 - 03 AND 2003 - 04, AND RESTORE THE APPEALS OF THE REVENUE . REGISTRY IS DIRECTED TO POST THESE APPEALS FOR FRESH H EARING AND DISPOSAL. MA NO.100 & 101/HYD/2014 (IN ITA NO .252 & 253 /HYD/201 3) M/S. LANCO INFRATECH LIMITED, HYDERABAD 4 5. IN THE RESULT, BOTH THE APPLI C A T ION S O F THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 27.06 .2014 SD/ - SD/ - ( B.RAMAKOTAIAH ) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DT/ - 27TH JUNE, 2014 C OPY FORWARDED TO: 1. M/S. LANCO I NFRATE CH LIMITED, L ANCO HOUSE PLOT NO.4, SOFTWA R E UNITS LAYOUT, HITE CH CITY, MADHAPUR , HYDERABAD . 2 . DY. COMMISSIONER OF INCOME - TAX CIRCLE 16(1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) V HYDERABAD 4. COMMISSIONER OF INCOME - TAX I V , HYDERABAD 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERAB AD. B.V.S