Income Tax Appellate Tribunal - Mumbai
Dcit Cc 3(1) Cen Rg 3A-9 Enercon Tower, ... vs Vaayu Infrastructure Llp, Mumbai on 28 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
"F" BENCH, MUMBAI
BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
ITA no.6842/Mum./2016
(Assessment Year : 2012-13)
Dy. Commissioner of Income Tax
................ Appellant
Central Circle-3(1), Range-3, Mumbai
v/s
Vaayu Infrastructure LLP
A-9, Enercon Tower
Veera Desai Road
................ Respondent
Veera Industrial Estate
Andheri (W), Mumbai 400 053
PAN - AAJFV3647B
ITA no.6830/Mum./2016
(Assessment Year : 2013-14)
Dy. Commissioner of Income Tax
................ Appellant
Central Circle-3(1), Range-3, Mumbai
v/s
Vaayu Infrastructure LLP
A-9, Enercon Tower
Veera Desai Road
................ Respondent
Veera Industrial Estate
Andheri (W), Mumbai 400 053
PAN - AAJFV3647B
Assessee by : Shri A.K. Ghosh
Revenue by : Ms. Arju Garodia
Date of Hearing - 26.03.2018 Date of Order - 28.03.2018
2
Vaayu Infrastructure LLP
ORDER
PER SAKTIJIT DEY, J.M.
Aforesaid appeals by the Revenue are against the common order dated 12th August 2016, passed by the learned Commissioner (Appeals)-51, Mumbai, for assessment year 2012-13 and 2013-14.
2. The only common issue arising for consideration in the present appeals relate to allowance of assessee's claim of depreciation on foundation / civil works of wind mills.
3. Brief facts are, the assessee as stated by the Assessing Officer is engaged in generation of power by wind energy through wind farm. During the assessment proceedings, the Assessing Officer noticed that the assessee has claimed depreciation on wind mills installed at Gujarat. After calling for necessary details on the depreciation claimed on wind mills, the Assessing Officer found that higher depreciation @ 100% as allowable to wind mills was claimed by the assessee on civil construction relating to foundation work of the wind mill. He, therefore, called upon the assessee to explain why depreciation claimed at higher rate on such civil construction should not be restricted to 5% as allowable to civil works like roads and buildings. Objecting to the proposed disallowance of depreciation, the assessee submitted that the foundation work for installing wind mill being a part 3 Vaayu Infrastructure LLP of the wind mill unit, depreciation is allowable at the higher rate. In this context, the assessee also brought to the notice of the Assessing Officer the decision of the Tribunal in case of another group company. The Assessing Officer, however, stating that the Department has not accepted the decision of the Tribunal restricted the depreciation on the civil work of the wind mill to 5%. Being aggrieved of part disallowance of depreciation assessee preferred appeals before the first appellate authority.
4. The learned Commissioner (Appeals) taking note of the fact that while deciding identical issue in case of assessee's sister concern, Enercon Wind Firm (Karnataka) Pvt. Ltd., the Tribunal has held that depreciation in respect of foundation / civil work of the wind mill is allowable at the same rate as applicable to wind mill allowed assessee's claim of depreciation.
5. Learned Departmental Representative relied upon the observations of the Assessing Officer and the ground raised.
6. Learned Authorised Representative strongly supporting the order of the first appellate authority submitted that the issue stands decided in favour of the assessee by the following decisions:-
i) Enorcon Wind Firm (Jaisalmer) Ltd. V/s ITO, ITA no.2666/ Mum./2009, order dated 04.06.2010;4
Vaayu Infrastructure LLP
ii) ITO v/s Enorcon Wind Firm (Karnataka) Ltd., ITA no.6402/ Mum./2010 & Ors. Dated 21.12.2011; and
iii) CIT v/s Miraj Products Pvt. Ltd., ITA no.14 of 2013, ITA no.53 of 2012 dated 18.07.2014.
7. We have heard the rival submissions and perused material on record. The limited issue arising for consideration in the present appeals are, whether the assessee is entitled to claim depreciation on the foundation work (civil construction) of wind mill generators at the same rate as is applicable to wind mills. In our view, the issue stands settled in favour of the assessee by the case laws cited before us by the learned Authorised Representative. In the case of CIT v/s Miraj Products Pvt. Ltd. (supra), the Hon'ble Rajasthan High Court while deciding identical issue relied upon the decision of the Hon'ble Gujarat High Court in CIT v/s Perry Engineering and Electronics Pvt. Ltd., and held that, since, the wind mill has to be fitted and mounted on a civil construction, such civil construction is integrally connected with the wind mill system and has to be considered as part of it. Therefore, the rate of depreciation applicable to wind mill would also apply to civil construction work. The same view has been expressed by the Co- ordinate Bench in case of assessee's sister concern as referred to above. Facts are identical in the present case also. There is no dispute that the civil construction on which the assessee has claimed depreciation at higher rate are the foundation work for installing the 5 Vaayu Infrastructure LLP wind mill generator. In fact, the Assessing Officer has also accepted the aforesaid factual position while referring to the decision of the Tribunal in case of assessee's sister concern and has restricted disallowance to 5% only for keeping the issue alive. In view of the settled position of law, we uphold the order of the learned Commissioner (Appeals) by dismissing the grounds raised.
8. In the result, both the appeals are dismissed.
Order pronounced in the open Court on 28.03.2018 Sd/- Sd/-
B.R. BASKARAN SAKTIJIT DEY
ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 28.03.2018
Copy of the order forwarded to:
(1) The Assessee;
(2) The Revenue;
(3) The CIT(A);
(4) The CIT, Mumbai City concerned;
(5) The DR, ITAT, Mumbai;
(6) Guard file.
True Copy
By Order
Pradeep J. Chowdhury
Sr. Private Secretary
(Asstt. Registrar/Sr.P.S)
ITAT, Mumbai