- (1.) THESE two appeals preferred by the revenue are having a common question for our consideration in the terms that "whether the assessees are rightly declared entitled by the ITAT and the CIT(A) to have depreciation as per Appendix -1 to the Income Tax Rules, 1962 for the cost incurred in civil work and foundation, electrical items, components in installation and common power evacuation while installing windmills -
(2.) THE Assessing Officer determined total income of the appellants by disallowing the depreciation for the cost incurred in civil work, foundation, electrical components, installation and common power evacuation while installing windmills by holding that the items aforesaid are not covered within the term "windmills and specially designed devises which run on windmills". A challenge to the same was given by the assessee before the CIT(A), Udaipur and that came to be accepted with finding that all the items concerned are integral part of "windmill". The civil work and foundation is necessary for strong foundation and no windmill could be installed without having a strong foundation. As such, depreciation on investment for civil work and foundation at the rate which the depreciation is allowed to windmill is applicable for these items too. The electrical items, components and common power evacuation too are integral part of a windmill as that could have not been operational without these items. The revenue challenged the decision of the CIT(A) before the ITAT, Jodhpur but that came to be dismissed by the judgment impugned. The ITAT affirmed the findings given by the CIT(A) by holding as under: - Without doing the civil construction work including foundation work, it was not possible to install the windmill. Similarly, the electric items, component and installation were necessary for the windmill, because in the absence of these components and electric items it was not possible for the windmill to produce electricity. Therefore, it was also the integral part of the windmill.
(3.) LEARNED counsel for the revenue submits that as per Appendix -1(iii)(8)(xiii), the depreciation is allowed only for windmills and in any specially designed devises which run on windmills and not to the other attached items, thus, the findings arrived by the CIT(A) and ITAT, Jodhpur are erroneous.;